Semi-Annual Reports for iShares Inc.

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NbtASHRh4qYnJLUPYRyCZaQ+ymehcJigo2i+QFaoqtxmaYOb8rOR3eiqWT25gCC1 xjAlTaRBILmM7XPzk6gW3g== 0001193125-04-083776.txt : 20040510 0001193125-04-083776.hdr.sgml : 20040510 20040510170137 ACCESSION NUMBER: 0001193125-04-083776 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040229 FILED AS OF DATE: 20040510 EFFECTIVENESS DATE: 20040510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISHARES INC CENTRAL INDEX KEY: 0000930667 IRS NUMBER: 510396525 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-09102 FILM NUMBER: 04793973 BUSINESS ADDRESS: STREET 1: 45 FREEMON STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 6179377264 MAIL ADDRESS: STREET 1: 45 FREEMON STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FORMER COMPANY: FORMER CONFORMED NAME: WEBS INDEX FUND INC DATE OF NAME CHANGE: 19970211 FORMER COMPANY: FORMER CONFORMED NAME: FOREIGN FUND INC DATE OF NAME CHANGE: 19950524 N-CSRS 1 dncsrs.htm SEMI-ANNUAL REPORTS FOR ISHARES INC. Semi-Annual Reports for iShares Inc.



OMB APPROVAL

OMB Number:		3235-0570


Expires:		October 31, 2006


Estimated average burden
hours per response:		19.3

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09102

iShares, Inc.

(Exact name of registrant as specified in charter)


45 Fremont Street, San Francisco, CA		94105

(Address of principal executive offices)		(Zip code)

CT Corporation

300 East Lombard Street, Baltimore, Maryland 21202

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-800-474-2737

Date of fiscal year end: August 31, 2004

Date of reporting period: February 29, 2004

Form N-CSRS is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSRS in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSRS, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507.

iShares^®

ITEM 1.

Reports to Stockholders

2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS

FEBRUARY, 29, 2004

[GRAPHIC[

INDUSTRIAL STRENGTH

INVESTMENT TOOLS

iSHARES MSCI JAPAN INDEX FUND

TABLE OF CONTENTS


Shareholder Letter		1

Managers’ Discussion & Analysis		4

Schedule of Investments		6

Financial Statements		12

Financial Highlights		15

Notes to the Financial Statements		16

iShares Family of Funds		22

To Our Shareholders:

Following several years of economic slowdown, international markets showed renewed strength during the past six months. Declining interest rates around the world largely fueled the rise. Corporate cost cutting measures and improving investor confidence levels also helped buoy market levels.

In general, emerging markets were the performance leaders, benefiting from rising export demand as global economic conditions firmed. As China developed into a more important global market, many emerging markets found they did not depend so heavily on the U.S. for export growth. Japan bounced back, delivering an impressive 7% gross domestic product (GDP) annualized growth rate in the fourth quarter of 2003 alone. Europe showed more muted growth levels, still somewhat hemmed in by the euro’s continued rise against the U.S. dollar. For many markets, in Europe and elsewhere, the weakening U.S. dollar had a dampening effect as it made those countries’ exports more expensive in U.S. dollars. For U.S.-based investors, however, the relative strength of the foreign currencies helped to boost returns.

While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares(R) Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.

With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios — and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.¹ With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.

As market conditions change, we encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. We will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their clients’ portfolios. To learn more about the iShares Funds, please visit our web site, www.iShares.com.

Regardless of market conditions, a sound, disciplined investing plan is essential. Such a plan should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe the iShares Funds are an indispensable tool for investors. And that is also why more and more investors have recognized the benefits of the iShares Funds. Assets under management for the iShares family of funds continue to grow, and as of February 29, 2004, had reached $68.3 billion.

On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.

/s/ Lee T. Kranefuss

Lee T. Kranefuss

President and Chairman Of the Board Of Directors

iShares, Inc.

¹	Morningstar Principia, BGI analysis 3/04.

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI.

To determine if the fund(s) are an appropriate investment for you, carefully consider the funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the funds’ prospectuses, which may be obtained by calling 1-800-iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.

There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs.

iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. or Standard and Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above.

This advertising section does not constitute part of the 2004 Semi-Annual Report.

THIS PAGE INTENTIONALLY LEFT BLANK.

Managers’ Discussion & Analysis

iSHARES^® MSCI JAPAN INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception To 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
42.12%	41.84%	42.95%	(0.19)%	(0.01)%	0.55%	(4.72)%	(4.62)%	(4.00)%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception To 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
42.12%	41.84%	42.95%	(0.93)%	(0.03)%	2.76%	(31.96)%	(31.42)%	(27.77)%

Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.

[CHART]

TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)


Technology Hardware & Equipment	11.67	%
Automobiles & Components	11.53	%
Capital Goods	9.17	%
Consumer Durables & Apparel	8.95	%
Materials	7.83	%
Banks	7.46	%
Pharmaceuticals & Biotechnology	5.27	%
Utilities	5.11	%
Diversified Financials	4.96	%
Transportation	4.42	%

The iShares MSCI Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 16.06%, while the Index returned 16.54%.

The Japanese market showed renewed signs of life during the reporting period. After more than a decade of anemic economic activity, gross domestic product (“GDP”) growth for the fourth quarter of 2003 was a robust 7.0% annual rate — its highest growth level in 13 years.

In addition to GDP growth that outpaced the U.S. and Europe, Japan saw export levels grow an annualized 17.9% during the fourth quarter, reassuring to a nation that has relied on an export-led recovery in the recent past. In the face of increasing export levels, the central bank has continued its efforts to maintain a weak yen through intervention. In the first two months of 2004, the amount spent on intervention was equal to 51% of 2003’s record annual level.


4		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Perhaps even more encouraging than the healthy fourth quarter GDP rate itself, foreign trade accounted for less of the growth than domestic consumer demand and firms’ capital investment. As increased foreign trade translated into higher levels of manufacturing activity, the benefits may have finally trickled through the economy, providing broad-based growth during the reporting period.

Not surprisingly, some of Japan’s large exporters logged gains during the reporting period. Toyota Motor Corp. (5.80% of the net assets of the Fund as of February 29, 2004) and Sony Corp. (2.26% of the net assets of the Fund as of February 29, 2004) both benefited from strong foreign trade. Financial company Mitsubishi Tokyo Financial Group Inc. (2.00% of the net assets of the Fund as of February 29, 2004) posted strong gains, while Nomura Holdings Inc. (1.93% of the net assets of the Fund as of February 29, 2004) logged more moderate returns during the reporting period. NTT DoCoMo Inc. (2.30% of the net assets of the Fund as of February 29, 2004), on the other hand, suffered losses, as did Canon Inc. (2.54% of the net assets of the Fund as of February 29, 2004).


MANAGERS’ DISCUSSION & ANALYSIS		5

Schedule of Investments (Unaudited)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.92%
Toyota Motor Corp.	6,023,700	$	207,846,870
Canon Inc.	1,863,000		90,882,207
NTT DoCoMo Inc.	39,744		82,572,652
Sony Corp.	1,987,200		81,117,628
Takeda Chemical Industries Ltd.	1,863,000		76,729,819
Honda Motor Co. Ltd.	1,738,800		75,752,224
Matsushita Electic Industrial Co. Ltd.	4,968,015		72,433,168
Mitsubishi Tokyo Financial Group Inc.	9,315		71,614,497
Nomura Holdings Inc.	4,347,000		69,028,418
Nissan Motors Co. Ltd.	5,526,900		61,359,415
Tokyo Electric Power Co. Inc. (The)	2,608,200		57,291,598
Nippon Telegraph & Telephone Corp.	11,799		54,642,998
Sumitomo Mitsui Financial Group Inc.	8,073		44,923,888
Mizuho Financial Group Inc.(1)	13,662		41,138,550
Hitachi Ltd.	6,210,000		40,524,712
Millea Holdings Inc.	3,105		39,785,832
Fuji Photo Film Co. Ltd.	1,242,000		38,762,768
UFJ Holdings Inc.(1)	7,452		33,420,099
East Japan Railway Co.	6,831		31,885,502
Murata Manufacturing Co. Ltd.	558,900		31,050,000
Sharp Corp.	1,863,000		30,896,540
Chubu Electric Power Co. Inc.	1,428,300		30,524,259
Kansai Electric Power Co. Inc. (The)	1,552,500		28,134,267
Rohm Co. Ltd.	248,400		28,077,430
NEC Corp.	3,726,000		27,418,122
Kyocera Corp.	372,600		27,384,020
JFE Holdings Inc.	1,055,750		26,669,138
Shin-Etsu Chemical Co. Ltd.	683,100		26,571,252
Kao Corp.	1,242,000		26,201,812
Denso Corp.	1,242,000		25,974,465
Toshiba Corp.	6,210,000		25,519,769
Ricoh Co. Ltd.	1,242,000		25,121,911
Mitsubishi Corp.	2,484,000		24,508,073
Nippon Steel Corp.	12,420,000		24,326,194
Mitsui & Co. Ltd.	3,105,000		24,013,591
Secom Co. Ltd.	621,000		23,985,173
Nintendo Co. Ltd.	248,400		23,871,499
Ito-Yokado Co. Ltd.	621,000		23,416,804
Hoya Corp.	248,400	$	23,303,130
Aeon Co. Ltd.	621,000		22,564,250
Tokyo Electron Ltd.	372,652		22,476,448
Fujitsu Ltd.(1)	3,726,000		22,439,209
Mitsui Sumitomo Insurance Co. Ltd.	2,484,000		21,825,371
Mitsubishi Estate Co. Ltd.	1,863,000		21,688,962
Yamanouchi Pharmaceutical Co. Ltd.	621,000		20,802,307
Tokyo Gas Co. Ltd.	5,589,000		20,768,204
Mitsubishi Heavy Industries Ltd.	6,831,000		20,006,590
Mitsui Fudosan Co. Ltd.	1,863,000		19,847,446
Seven-Eleven Japan Co. Ltd.	621,000		19,608,731
Fanuc Ltd.	310,500		19,495,058
Dai Nippon Printing Co. Ltd.	1,242,000		19,324,547
Softbank Corp.	496,800		18,369,687
Bridgestone Corp.	1,242,000		18,335,585
SANYO Electric Co. Ltd.	3,726,000		18,244,646
Mitsubishi Electric Corp.	3,726,000		17,869,522
Tohoku Electric Power Co. Inc.	1,055,700		17,672,298
TDK Corp.	248,400		17,323,888
Asahi Glass Co. Ltd.	1,863,000		17,153,377
ORIX Corp.	186,300		17,136,326
Nikko Cordial Corp.	3,105,000		17,022,652
Kirin Brewery Co. Ltd.	1,863,000		16,982,866
Eisai Co. Ltd.	621,000		16,852,142
Daiwa Securities Group Inc.	2,484,000		16,687,315
Nippon Oil Corp.	3,105,500		16,229,549
Kyushu Electric Power Co. Inc.	931,500		16,215,568
Central Japan Railway Co.	1,863		16,130,313
Sompo Japan Insurance Inc.	1,863,000		15,806,343
Asahi Kasei Corp.	3,105,000		15,345,964
Nitto Denko Corp.	310,500		15,345,964
Fujisawa Pharmaceutical Co. Ltd.	621,000		14,919,687
SMC Corp.	124,200		14,561,614
Toppan Printing Co. Ltd.	1,242,000		14,538,880
Advantest Corp.	186,300		13,862,521
Daikin Industries Ltd.	621,000		13,640,857
Shizuoka Bank Ltd. (The)	1,863,000		13,623,806
Ajinomoto Co. Inc.	1,242,000		13,538,550
Omron Corp.	621,000		13,498,764
Sankyo Co. Ltd.	621,000		13,441,928
Japan Tobacco Inc.	1,863		13,333,937


6		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)(Continued)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Takefuji Corp.	186,300	$	13,333,937
Olympus Corp.	621,000		12,930,395
Keyence Corp.	62,120		12,809,478
Osaka Gas Co. Ltd.	4,347,000		12,532,537
Toyota Industries Corp.	558,900		12,379,077
Daiwa House Industry Co. Ltd.	1,242,000		12,288,138
Pioneer Corp.	434,700		12,055,107
Sekisui House Ltd.	1,242,000		11,844,811
Toray Industries Inc.	3,105,000		11,822,076
JSR Corp.	558,900		11,637,356
Komatsu Ltd.	1,863,000		11,321,911
Promise Co. Ltd.	186,300		11,287,809
NTT Data Corp.	3,105		11,282,125
Taisho Pharmaceutical Co. Ltd.	621,000		11,196,870
Daiichi Pharmaceutical Co. Ltd.	621,000		11,094,563
Matsushita Electric Works Ltd.	1,242,000		11,083,196
OJI Paper Co. Ltd.	1,863,000		10,997,941
Tostem Inax Holding Corp.	621,000		10,997,941
Shionogi & Co. Ltd.	621,000		10,901,318
Nippon Yusen Kabushiki Kaisha	2,484,000		10,776,277
Sumitomo Electric Industries Ltd.	1,242,000		10,651,236
Itochu Corp.	3,105,000		10,600,082
Bank of Yokohama Ltd. (The)	2,484,000		10,367,051
Toyo Seikan Kaisha Ltd.	621,000		10,259,061
Nippon Express Co. Ltd.	1,863,000		10,213,591
Kinki Nippon Railway Co. Ltd.¹	3,105,000		10,060,132
Sumitomo Trust & Banking Co. Ltd. (The)	1,863,000		10,026,030
Tokyu Corp.	1,863,000		10,008,979
Sumitomo Corp.	1,242,000		9,662,273
Trend Micro Inc.	310,500		9,605,437
Mitsubishi Chemical Corp.	3,726,000		9,480,395
Sumitomo Chemical Co. Ltd.	2,484,000		9,253,048
Resona Holdings Inc^.1	8,073,000		9,162,109
Chugai Pharmaceutical Co. Ltd.	621,000		9,156,425
Marui Co. Ltd.	621,000		9,150,741
Terumo Corp.	434,700		9,051,277
West Japan Railway Co.	2,484		9,025,700
Mitsui O.S.K. Lines Ltd.	1,863,000		8,934,761
Yamato Transport Co. Ltd.	621,000		8,889,292
Nippon Unipac Holding	1,863		8,627,842
ACOM Co. Ltd.	142,830	$	8,601,697
Kubota Corp.	1,863,000		8,474,382
Fast Retailing Co. Ltd.	124,200		8,468,699
Stanley Electric Co. Ltd.	496,800		8,457,331
Yokogawa Electric Corp.	621,000		8,428,913
Credit Saison Co. Ltd.	310,500		8,255,560
AIFUL Corp.	93,150		8,218,616
Keihin Electric Express Railway Co. Ltd.	1,242,000		8,184,514
Alps Electric Co. Ltd.	621,000		8,110,626
Daido Life Insurance Co. Ltd.	2,484		7,729,819
Sumitomo Metal Mining Co. Ltd.	1,242,000		7,684,349
Nikon Corp.¹	621,000		7,655,931
Oriental Land Co. Ltd.	124,200		7,650,247
Shiseido Co. Ltd.	621,000		7,366,063
Toho Co. Ltd.	496,800		7,129,621
Konica Minolta Holdings Inc.	621,000		7,127,348
Isetan Co. Ltd.	621,000		7,127,347
Tobu Railway Co. Ltd.	1,863,000		7,007,990
UNY Co. Ltd.	621,000		6,990,939
Yamaha Corp.	372,600		6,905,684
Hirose Electric Co. Ltd.	62,100		6,854,530
Keio Electric Railway Co. Ltd.	1,242,000		6,831,796
Mitsui Chemicals Inc.	1,242,000		6,774,959
Nippon Meat Packers Inc.	621,000		6,746,540
Kajima Corp.	1,863,000		6,513,509
Taisei Corp.	1,863,000		6,479,407
Daito Trust Construction Co. Ltd.	186,300		6,428,254
Casio Computer Co. Ltd.	621,000		6,416,886
Sekisui Chemical Co. Ltd.	1,242,000		6,411,203
Marubeni Corp.	3,105,000		6,252,059
Nidec Corp.	62,100		6,138,386
Asahi Breweries Ltd.	621,000		6,098,600
Sumitomo Realty & Development Co. Ltd.	621,000		6,041,763
Joyo Bank Ltd.	1,863,000		6,036,079
Yamada Denki Co. Ltd.	186,300		5,916,721
Sumitomo Metal Industries Ltd.	6,210,000		5,854,201
Uni-Charm Corp.	124,200		5,808,731
Obayashi Corp.	1,242,000		5,695,058
Nisshin Seifun Group Inc.	621,000		5,592,751


SCHEDULE OF INVESTMENTS		7

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


Security	Shares	Value
Mitsui Trust Holdings Inc.¹	1,242,000	$	5,570,016
Shimizu Corp.	1,242,000		5,547,282
Oki Electric Industry Co. Ltd.¹	1,242,000		5,524,547
Teijin Ltd.	1,863,000		5,490,445
Takashimaya Co. Ltd.	621,000		5,456,343
Citizen Watch Co. Ltd.	621,000		5,427,924
Toto Ltd.	621,000		5,410,873
Takara Holdings Inc.	621,000		5,399,506
Seino Transportation Co. Ltd.	621,000		5,376,771
Kaneka Corp.	621,000		5,336,985
NSK Ltd.	1,242,000		5,263,097
Nissan Chemical Industries Ltd.	621,000		5,052,801
Bank of Fukuoka Ltd.	1,242,000		5,024,382
CSK Corp.	124,200		5,024,382
Anritsu Corp.¹	621,000		5,018,698
Chiba Bank Ltd. (The)	1,242,000		4,990,280
TonenGeneral Sekiyu K.K.	621,000		4,984,597
Mitsui Mining & Smelting Co. Ltd.	1,242,000		4,933,443
Kuraray Co. Ltd.	621,000		4,916,392
JAFCO Co. Ltd.	62,100		4,859,555
Konami Corp.	186,300		4,842,504
Taiheiyo Cement Corp.	1,863,000		4,723,147
Kikkoman Corp.	621,000		4,717,463
NGK Insulators Ltd.	621,000		4,643,575
Nissin Food Products Co. Ltd.	186,300		4,569,687
Furkukawa Electric Co. Ltd.	1,242,000		4,444,646
Suzuken Co. Ltd.	124,200		4,376,442
THK Co. Ltd.	248,400		4,353,707
Dainippon Screen Manufacturing Co. Ltd.¹	621,000		4,342,339
Tosoh Corp.	1,242,000		4,319,605
Mitsubishi Rayon Co. Ltd.	1,242,000		4,308,237
Nippon Shokubai Co. Ltd.	621,000		4,302,554
Lawson Inc.	124,200		4,296,870
Shimamura Co. Ltd.	62,100		4,262,768
Kamigumi Co. Ltd.	621,000		4,166,145
Mabuchi Motor Co. Ltd.	62,100		4,137,727
Shimano Inc.	186,300		4,109,308
Hino Motors Ltd.	621,000		4,035,420
Kawasaki Heavy Industries Ltd.	3,105,000		3,978,583
Kyowa Hakko Kogyo Co. Ltd.	621,000		3,938,797
Japan Airlines System Corp.	1,242,000	$	3,933,114
Daimaru Inc. (The)	621,000		3,927,430
All Nippon Airways Co. Ltd.¹	1,242,000		3,830,807
Showa Denko K.K.	1,863,000		3,734,185
Suruga Bank Ltd. (The)	621,000		3,734,185
Denki Kagaku Kogyo Kabushiki Kaisha	1,242,000		3,717,133
Sumitomo Bakelite Co. Ltd.	621,000		3,643,246
Mitsubishi Materials Corp.¹	1,863,000		3,631,878
Dowa Mining Co. Ltd.	621,000		3,478,419
Aeon Credit Service Co. Ltd.	62,190		3,472,076
Amada Co. Ltd.	621,000		3,438,633
Ishikawajima-Harima Heavy Industries Co. Ltd.	2,484,000		3,432,949
FamilyMart Co. Ltd.	124,200		3,398,847
77 Bank Ltd. (The)	621,000		3,370,428
Nisshinbo Industries Inc.	621,000		3,290,857
Oracle Corp.	62,100		3,273,806
Nippon Mining Holdings Inc.	931,500		3,248,229
Nippon Kayaku Co. Ltd.	621,000		3,222,652
Kinden Corp.	621,000		3,171,499
Benesse Corp.	124,200		3,137,397
Toyoda Gosei Co. Ltd.	124,200		3,137,397
SEGA Corp.¹	310,500		3,097,611
Shimachu Co. Ltd.	124,200		3,069,193
Namco Ltd.	124,200		3,057,825
Fujikura Ltd.	621,000		3,018,039
Mitsui Engineering & Shipbuilding Co. Ltd.	1,863,000		3,000,989
Kawasaki Kisen Kaisha Ltd.	621,000		2,989,621
Okumura Corp.	621,000		2,955,519
Teikoku Oil Co. Ltd.	621,000		2,898,682
Ebara Corp.	621,000		2,875,948
Minebea Co. Ltd.	621,000		2,875,948
Mitsukoshi Ltd.	621,000		2,864,580
Gunma Bank Ltd.	621,000		2,813,427
NTN Corp.	621,000		2,813,427
Sumitomo Heavy Industries Ltd.¹	1,242,000		2,773,641
Nippon Sanso Corp.	621,000		2,756,590
Meiji Seika Kaisha Ltd.	621,000		2,733,855
Meiji Dairies Corp.	621,000		2,711,120


8		2004 iSHARE SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


Security	Shares	Value
Toyobo Co. Ltd.	1,242,000	$	2,705,437
Ube Industries Ltd.	1,863,000		2,694,069
Dainippon Ink & Chemicals Inc.	1,242,000		2,682,702
Gunze Ltd.	621,000		2,677,018
Fuji Electric Holdings Co. Ltd.	1,242,000		2,671,334
Coca-Cola West Japan Co. Ltd.	124,200		2,654,283
Hitachi Cable Ltd.	621,000		2,546,293
Fuji Television Network Inc.	577		2,529,590
Aoyama Trading Co. Ltd.	124,200		2,495,140
Ito En Ltd.	62,100		2,455,354
TIS Inc.	62,100		2,455,354
Daicel Chemical Industries Ltd.	621,000		2,370,099
Bandai Co. Ltd.	101,699		2,313,033
Nippon Sheet Glass Co. Ltd.	621,000		2,210,955
Meitec Corp.	62,100		2,193,904
Nishimatsu Construction Co. Ltd.	621,000		2,193,904
Nichirei Corp.	621,000		2,125,700
Katokichi Co. Ltd.	124,200		2,115,470
Toda Corp.	621,000		2,051,812
Mitsubishi Gas Chemical Co. Inc.	621,000		2,017,710
World Co. Ltd.	62,100		2,000,659
Itochu Techno-Science Corp.	62,100		1,989,292
Capcom Co. Ltd.	186,300		1,935,297
Ariake Japan Co. Ltd.	62,100		1,898,353
Sapporo Breweries Ltd.	621,000		1,864,250
Hitachi Software Engineering Co. Ltd.	62,100		1,628,377
Hokugin Financial Group Inc.¹	1,242,000		1,580,066
Asatsu-DK Inc.	62,100		1,563,015
Autobacs Seven Co. Ltd.	62,100		1,560,173
Saizeriya Co. Ltd.	124,290		1,439,016
Sumitomo Osaka Cement Co. Ltd.	621,000		1,301,565
Ishihara Sangyo Kaisha Ltd.¹	621,000		1,267,463
Aderans Co. Ltd.	62,100		1,250,412
Bellsystem24 Inc.	6,210		1,242,455
Kanebo Ltd.¹	1,242,000		1,204,942
Snow Brand Milk Products Co. Ltd.¹	310,500		903,704

TOTAL COMMON STOCKS (Cost: $3,359,651,108)			3,581,234,625


Security	Shares or Principal		Value
SHORT-TERM INVESTMENTS – 4.88%

MONEY MARKET FUNDS – 2.33%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^{2, 3}		56,731,576	$	56,731,576
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^{2, 3}		21,052,238		21,052,238
BlackRock Temp Cash Money Market Fund²		975,969		975,969
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares²		4,922,509		4,922,509

				83,682,292

FLOATING RATE NOTES – 1.36%

Beta Finance Inc.
1.05%, 05/20/04^{2, 4}	$	956,920		956,889
1.05%, 09/15/04^{2, 4}		1,913,840		1,913,736
1.05%, 10/12/04^{2, 4}		956,920		956,862
1.14%, 08/23/04^{2, 4}		956,920		957,314
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		1,435,380		1,435,250
1.38%, 11/22/04²		478,460		478,486
1.40%, 10/29/04²		1,913,840		1,913,808
CC USA Inc.
1.05%, 04/19/04^{2, 4}		842,090		842,084
1.06%, 05/24/04^{2, 4}		1,913,840		1,913,796
1.09%, 07/15/04^{2, 4}		956,920		957,048
1.51%, 02/15/05^{2, 4}		1,243,996		1,245,899
Dorada Finance Inc.
1.05%, 05/20/04^{2, 4}		1,913,840		1,913,777
1.24%, 08/09/04²		478,460		478,428
1.48%, 01/18/05^{2, 4}		1,435,380		1,435,317
Five Finance Inc.
1.06%, 04/15/04^{2, 4}		956,920		956,920
HBOS Treasury Services PLC
1.16%, 01/24/05²		1,913,840		1,913,840
Holmes Financing PLC
1.05%, 04/15/04²		191,384		191,384


SCHEDULE OF INVESTMENTS		9

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


Security	Principal		Value
K2 USA LLC
1.05%, 08/16/04^{2, 4}	$	478,460	$	478,427
1.05%, 09/27/04^{2, 4}		2,066,947		2,066,770
1.06%, 05/17/04²		956,920		956,910
1.07%, 04/13/04²		956,920		956,915
1.46%, 01/12/05^{2, 4}		956,920		956,837
Links Finance LLC
1.05%, 06/28/04²		956,920		956,858
1.06%, 07/20/04²		765,536		765,477
1.07%, 03/29/04²		956,920		956,920
1.07%, 05/04/04²		956,920		956,912
Nationwide Building Society
1.09%, 07/23/04^{2, 4}		1,435,380		1,435,380
1.17%, 12/28/04^{2, 4}		1,913,840		1,913,840
Northern Rock PLC
1.11%, 01/13/05^{2, 4}		1,818,148		1,818,148
Permanent Financing PLC
1.06%, 12/10/04²		956,920		956,920
Sigma Finance Inc.
1.06%, 07/01/04²		956,920		956,840
1.06%, 07/20/04²		956,920		956,846
1.09%, 10/07/04²		1,913,840		1,913,610
1.24%, 08/06/04²		478,460		478,439
Tango Finance Corp.
1.05%, 01/18/05^{2, 4}		842,090		842,014
1.06%, 07/15/04^{2, 4}		574,152		574,081
1.07%, 02/25/05^{2, 4}		1,071,750		1,071,539
1.10%, 07/06/04^{2, 4}		574,152		574,132
WhistleJacket Capital LLC
1.05%, 09/15/04^{2, 4}		956,920		956,816
1.32%, 02/04/05^{2, 4}		478,460		478,371
White Pine Finance LLC
1.04%, 08/26/04^{2, 4}		956,920		956,848
1.06%, 04/20/04^{2, 4}		956,920		956,920
1.06%, 07/06/04^{2, 4}		1,148,304		1,148,266
1.06%, 11/15/04^{2, 4}		1,148,304		1,148,304

				48,650,178
COMMERCIAL PAPER—0.57%
Amsterdam Funding Corp
1.03%, 03/03/04²		1,435,380		1,435,298
Corporate Asset Funding Corp.
1.03%, 03/16/04²	$	956,920	$	956,509
1.05%, 05/21/04²		995,196		992,857
CRC Funding LLC
1.03%, 03/26/04²		765,536		764,988
Delaware Funding Corp.
1.02%, 03/16/04²		1,935,007		1,934,185
1.03%, 03/05/04²		855,314		855,216
Edison Asset Securitization
1.03%, 03/03/04²		1,435,380		1,435,298
Eureka Securitization Inc.
1.04%, 04/14/04²		1,148,304		1,146,844
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		669,844		669,671
Galaxy Funding Inc.
1.05%, 05/17/04²		956,920		954,781
Gemini Securitization Corp.
1.04%, 04/19/04²		478,460		477,783
GIRO Funding US Corp.
1.05%, 05/19/04²		478,460		477,358
Jupiter Securitization Corp.
1.03%, 03/24/04²		956,920		956,290
Liberty Street Funding Corp.
1.03%, 03/10/04²		382,768		382,669
New Center Asset Trust
1.04%, 03/01/04²		478,460		478,460
Park Avenue Receivables Corp.
1.03%, 03/22/04²		786,301		785,829
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		1,913,840		1,913,066
1.04%, 05/20/04²		478,460		477,354
Receivables Capital Corp.
1.03%, 03/15/04²		2,086,085		2,085,250
Windmill Funding Corp.
1.03%, 03/05/04²		1,092,803		1,092,677

				20,272,383
TIME DEPOSITS 0.44%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		1,913,840		1,913,840
1.33%, 02/10/05²		956,920		956,784
1.39%, 02/02/05²		956,920		956,787
1.40%, 10/25/04²		1,913,840		1,913,653


10		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI JAPAN INDEX FUND

February 29, 2004


Security	Principal		Value
Bank of New York
1.39%, 11/01/04²	$	1,913,840	$	1,913,711
Bank of Novia Scotia
1.24%, 10/07/04²		1,435,380		1,435,293
1.42%, 10/29/04²		1,435,380		1,435,451
SunTrust Bank
1.01%, 03/01/04²		3,157,836		3,157,836
Toronto-Dominion Bank
1.34%, 02/10/05²		765,536		765,427
1.41%, 11/01/04²		1,435,380		1,435,284

				15,884,066
U.S. GOVERNMENT AGENCY NOTES – 0.13%

Federal Home Loan
Mortgage Corporation
1.15%, 05/12/04²		1,435,379		1,432,079
1.28%, 08/19/04²		765,535		760,881
Federal National
Mortgage Association
1.28%, 08/20/04²		2,487,990		2,472,776

				4,665,736
REPURCHASE AGREEMENTS – 0.05%

Merrill Lynch Government
Securities Inc.
1.06%, 03/01/04²		1,913,840		1,913,840

				1,913,840

TOTAL SHORT-TERM INVESTMENTS (COST: $175,068,495)				175,068,495


TOTAL INVESTMENTS IN SECURITIES – 104.80% (Cost $3,534,719,603)				3,756,303,120

Other Assets, Less Liabilities – (4.80%)				(172,111,323	)


NET ASSETS – 100.00%			$	3,584,191,797

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See Notes To Financial Statements.


SCHEDULE OF INVESTMENTS		11

Statement of Assets and Liabilities (Unaudited)

iSHARES, INC.

February 29, 2004


	iShares MSCI Japan Index Fund

ASSETS
Investments at cost	$	3,534,719,603

Foreign currency, at cost	$	1,029,759

Investments in securities, at value (including securities on loan^a) (Note 1)	$	3,756,303,120
Foreign currency, at value		1,009,450
Receivables:
Investment securities sold		4,302,385
Dividends and interest		1,656,149
Capital stock sold		105,048

Total Assets		3,763,376,152

LIABILITIES
Payables:
Collateral for securities on loan (Note 5)		174,765,583
Advisory fees (Note 2)		3,104,427
Distribution fees		1,314,345

Total Liabilities		179,184,355

NET ASSETS	$	3,584,191,797

Net assets consist of:
Paid-in capital	$	3,385,275,402
Accumulated net investment loss		(2,230,768	)
Accumulated net realized loss		(20,382,522	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		221,529,685

NET ASSETS	$	3,584,191,797

Shares outstanding		372,600,000

Net asset value per share	$	9.62

^a	Securities on loan with market value of $165,952,637. See Note 5.

See notes to financial statements.

Statement of Operations (Unaudited)

iSHARES, INC.

For the six months ended February 29, 2004


	iShares MSCI Japan Index Fund

NET INVESTMENT INCOME
Dividends^a	$	8,888,555
Interest		13,304
Securities lending income		432,618

Total investment income		9,334,477

EXPENSES (NOTE 2)
Advisory fees		7,621,224
Distribution fees		3,229,332

Total expenses		10,850,556

Net investment loss		(1,516,079	)

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(2,580,811	)
In-kind redemptions		64,014,188
Foreign currency transactions		431,806

Net realized gain		61,865,183

Net change in unrealized appreciation (depreciation) on:
Investments		266,267,675
Translation of assets and liabilities in foreign currencies		(75,758	)

Net change in unrealized appreciation (depreciation)		266,191,917

Net realized and unrealized gain		328,057,100

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	326,541,021

^a	Net of foreign withholding tax of $925,296.

See notes to financial statements.

Statements of Changes in Net Assets

iSHARES, INC.


	iShares MSCI Japan Index Fund
	For the six months ended February 29, 2004 (unaudited)			For the year ended August 31, 2003

INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(1,516,079	)	$	212,198
Net realized gain		61,865,183			8,673,926
Net change in unrealized appreciation (depreciation)		266,191,917			171,100,487

Net increase in net assets resulting from operations		326,541,021			179,986,611

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(474,213	)		—

Total distributions to shareholders		(474,213	)		—

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,731,933,278			1,146,153,031
Cost of shares redeemed		(200,663,190	)		(265,660,262	)

Net increase in net assets from capital share transactions		1,531,270,088			880,492,769

INCREASE IN NET ASSETS		1,857,336,896			1,060,479,380
NET ASSETS:
Beginning of period		1,726,854,901			666,375,521

End of period	$	3,584,191,797		$	1,726,854,901

Accumulated net investment loss included in net assets at end of period	$	(2,230,768	)	$	(240,476	)

SHARES ISSUED AND REDEEMED:
Shares sold		185,400,000			158,400,000
Shares redeemed		(21,000,000	)		(36,000,000	)

Net increase in shares outstanding		164,400,000			122,400,000

See notes to financial statements

Financial Highlights

iSHARES, INC.

(For a share outstanding throughout each period)


	*iSHARES MSCI Japan Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year Ended Aug. 31, 2003			Year Ended Aug. 31, 2002			Year Ended Aug. 31, 2001			Year Ended Aug. 31, 2000			Year Ended Aug. 31, 1999
Net Asset Value, Beginning Of Period	$	8.29		$	7.77		$	9.07		$	13.82		$	13.22		$	8.39

Income From Investment Operations:
Net investment income (loss)¹		(0.01	)		0.00³			(0.01	)		(0.01	)		(0.05	)		(0.03	)
Net realized and unrealized gain (loss)		1.34			0.52			(1.29	)		(4.74	)		1.21			4.91

Total from investment operations		1.33			0.52			(1.30	)		(4.75	)		1.16			4.88

Less Distributions From:
Net investment income		(0.00	)³		—			—			—			(0.00	)³		(0.04	)
Net realized gain		—			—			—			—			(0.53	)		—
Return of capital		—			—			—			—			(0.03	)		(0.01	)

Total distributions		(0.00	)		—			—			—			(0.56	)		(0.05	)

Net Asset Value, End Of Period	$	9.62		$	8.29		$	7.77		$	9.07		$	13.82		$	13.22

Total Return		16.06	%⁴		6.69	%		(14.33	)%		(34.37	)%		8.75	%		58.14	%

Ratios/Supplemental Data:
Net assets, end of period (000s)	$	3,584,192		$	1,726,855		$	666,376		$	527,899		$	787,790		$	713,653
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.88	%		0.94	%
Ratio of net investment income (loss) to average net assets⁵		(0.12	)%		0.03	%		(0.12	)%		(0.11	)%		(0.32	)%		(0.27	)%
Portfolio turnover rate²		0	%⁶		2	%		2	%		21	%		22	%		0	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

⁶	Rounds to less than 1%.

See Notes To Financial Statements.


FINANCIAL HIGHLIGHTS		15

Notes To The Financial Statements (Unaudited)

iSHARES, INC.

1. SIGNIFICANT ACCOUNTING POLICIES

iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994. As of February 29, 2004, the Company offered 24 investment portfolios or funds.

These financial statements relate only to the iShares MSCI Japan Index Fund (the “Fund”).

The Fund’s investment objective is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment advisor utilizes a “passive” or index approach to achieve the Fund’s investment objective. The Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold stocks in fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence.

The Fund invests in the securities of foreign issuers of a single country, which may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; lesser regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war.

Under the Fund’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.

The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates.

Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.

SECURITY VALUATION

Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark index used by the Fund. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.

SECURITY TRANSACTIONS AND INCOME RECOGNITION


16		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes To The Financial Statements (Unaudited) (Continued)

iSHARES, INC.

FOREIGN CURRENCY TRANSLATION

The Fund’s accounting records are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange at the end of each day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.

Foreign currency and assets and liabilities denominated in foreign currency are generally converted into U.S. dollars using the same exchange rate utilized by MSCI in the calculation of the MSCI Japan Index (currently, the exchange rate as of 4:00 p.m. London time). However, the Company may use a different exchange rate from the rate used by MSCI in the event that the investment advisor concludes that such rate is more appropriate.

The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually. Distributions of net realized gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Fund.

At August 31, 2003, the tax year-end of the Fund, the components of distributable earnings (accumulated losses) on a tax basis consisted of undistributed ordinary income of $474,213, unrealized depreciation of $52,845,227 and capital and other losses of $74,779,399, for total accumulated losses of $127,150,413.

FEDERAL INCOME TAXES

The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the Fund to qualify as a regulated investment company, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended February 29, 2004.

At August 31, 2003, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $2,959,030, $62,572,173 and $3,621,148 expiring in 2009, 2010 and 2011, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first.

If the Fund owns shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”, the Fund may elect to mark-to-market annually the shares of the passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.

For the year ended August 31, 2003, the Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset value per share.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Fund’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. Repurchase agreements held by the Fund at February 29, 2004 represent collateral from securities on loan. For further information, see Note 5, below.


NOTES TO THE FINANCIAL HIGHLIGHTS		17

Notes to The Financial Statements (Unaudited) ( Continued)

iSHARES, INC.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Barclays Global Fund Advisors (“BGFA”) acts as investment advisor to the Company and is responsible for the investment management of the Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA serves as investment advisor to the Fund pursuant to an Advisory Agreement between the Company and BGFA, as amended on December 28, 2001. Under this agreement, BGFA is responsible for placing purchase and sale orders, providing continuous supervision of the investment portfolio of the Fund, and the general management of the Company’s affairs.

Under the Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of the Fund, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees.

For its investment advisory services to the Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds) as follows:


Advisory Fee		Aggregate Net Assets
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion

Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the MSCI Japan Index. Under a sub-license agreement between BGI and the Fund, the fee for the use of the MSCI Japan Index is paid directly by BGI to MSCI.

Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian and transfer agent for the Company. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above.

BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Fund’s investment advisor. As securities lending agent, BGI receives as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 29, 2004, BGI earned securities lending agent fees of $465,665.

SEI Investments Distribution Co. (the “Distributor”) serves as the Fund’s underwriter and distributor of the shares of the Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from the Fund, not to exceed 0.25% of the average daily net assets of the Fund, for distribution-related services.

Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Fund may invest in the Institutional Shares of the Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively the “Master Portfolios”), respectively, which are managed by BGFA, the Fund’s investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the Master Portfolios in which they invest do charge an advisory fee.


18		2004 iSHARE SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to The Financial Statements (Unaudited) ( Continued)

iSHARES, INC.

Income distributions from the IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statement of Operations.

As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, aggregated $9,844,240 and $11,683,322, respectively.

In-kind purchases and sales for the six months ended February 29, 2004, aggregated $1,728,999,032 and $200,119,812, respectively.

At February 29, 2004, the cost of investments for federal income tax purposes was $3,543,721,162. Net unrealized appreciation aggregated $212,581,958, of which $285,485,946 represented gross unrealized appreciation on securities and $72,903,988 represented gross unrealized depreciation on securities.

4. CAPITAL SHARE TRANSACTIONS

The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. At February 29, 2004, 2,124,600,000 shares were authorized to the Fund.

The Company issues and redeems capital shares of the Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for purchase of Creation Units of the Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the MSCI Japan Index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

The Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to have a value equal of at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.

As of February 29, 2004, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to the Fund, based on the Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statement of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.


NOTES TO FINANCIAL STATEMENTS		19

Notes:


20		2004 iSHARE SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES		21

The iShares^® Family of Funds

The following is a list of iShares Funds being offered as of February 29, 2004, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors which should be carefully considered to determine if the fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.

Broad Market

iShares Dow Jones U.S. Total Market Index Fund (IYY)

iShares Russell 3000 Index Fund (IWV)

iShares Russell 3000 Growth Index Fund (IWZ)

iShares Russell 3000 Value Index Fund (IWW)

iShares S&P 1500 Index Fund (ISI)

Large Cap

iShares Russell 1000 Index Fund (IWB)

iShares Russell 1000 Growth Index Fund (IWF)

iShares Russell 1000 Value Index Fund (IWD)

iShares S&P 100 Index Fund (OEF)

iShares S&P 500 Index Fund (IVV)

iShares S&P 500/BARRA Growth Index Fund (IVW)

iShares S&P 500/BARRA Value Index Fund (IVE)

Mid Cap

iShares Russell Midcap Index Fund (IWR)

iShares Russell Midcap Growth Index Fund (IWP)

iShares Russell Midcap Value Index Fund (IWS)

iShares S&P MidCap 400 Index Fund (IJH)

iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)

iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)

Small Cap

iShares Russell 2000 Index Fund (IWM)

iShares Russell 2000 Growth Index Fund (IWO)

iShares Russell 2000 Value Index Fund (IWN)

iShares S&P SmallCap 600 Index Fund (IJR)

iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)

iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)

Sector & Industry

iShares Cohen & Steers Realty Majors Index Fund (ICF)

iShares Dow Jones Transportation Average Index Fund (IYT)

iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)

iShares Dow Jones U.S. Energy Sector Index Fund (IYE)

iShares Dow Jones U.S. Financial Sector Index Fund (IYF)

iShares Dow Jones U.S. Financial Services Index Fund (IYG)

iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)

iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)

iShares Dow Jones U.S. Real Estate Index Fund (IYR)

iShares Dow Jones U.S. Technology Sector Index Fund (IYW)

iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)

iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)

iShares Goldman Sachs Natural Resources Index Fund (IGE)

iShares Goldman Sachs Networking Index Fund (IGN)

iShares Goldman Sachs Semiconductor Index Fund (IGW)

iShares Goldman Sachs Software Index Fund (IGV)

iShares Goldman Sachs Technology Index Fund (IGM)

iShares Nasdaq Biotechnology Index Fund (IBB)

Specialty

iShares Dow Jones Select Dividend Index Fund (DVY)

Global Sector

iShares S&P Global Energy Sector Index Fund (IXC)

iShares S&P Global Financials Sector Index Fund (IXG)

iShares S&P Global Healthcare Sector Index Fund (IXJ)

iShares S&P Global Technology Sector Index Fund (IXN)

iShares S&P Global Telecommunications Sector Index Fund (IXP)

International/Broad Market

iShares MSCI EAFE Index Fund (EFA)

iShares MSCI Emerging Markets Index Fund (EEM)

International/Regional

iShares MSCI EMU Index Fund (EZU)

iShares MSCI Pacific ex-Japan Index Fund (EPP)

iShares S&P Europe 350 Index Fund (IEV)

International/Developed Country

iShares MSCI Australia Index Fund (EWA)

iShares MSCI Austria Index Fund (EWO)

iShares MSCI Belgium Index Fund (EWK)

iShares MSCI Canada Index Fund (EWC)

iShares MSCI France Index Fund (EWQ)

iShares MSCI Germany Index Fund (EWG)

iShares MSCI Hong Kong Index Fund (EWH)

iShares MSCI Italy Index Fund (EWI)

iShares MSCI Japan Index Fund (EWJ)

iShares MSCI Netherlands Index Fund (EWN)

iShares MSCI Singapore Index Fund (EWS)

iShares MSCI Spain Index Fund (EWP)

iShares MSCI Sweden Index Fund (EWD)

iShares MSCI Switzerland Index Fund (EWL)

iShares MSCI United Kingdom Index Fund (EWU)

iShares S&P/TOPIX 150 Index Fund (ITF)

International/Emerging Country

iShares MSCI Brazil Index Fund (EWZ)

iShares MSCI Malaysia Index Fund (EWM)

iShares MSCI Mexico Index Fund (EWW)

iShares MSCI South Africa Index Fund (EZA)

iShares MSCI South Korea Index Fund (EWY)

iShares MSCI Taiwan Index Fund (EWT)

iShares S&P Latin America 40 Index Fund (ILF)

Global/Broad Market

iShares S&P Global 100 Index Fund (IOO)

Fixed Income

iShares GS $ InvesTop^™ Corporate Bond Fund (LQD)

iShares Lehman 1-3 Year Treasury Bond Fund (SHY)

iShares Lehman 7-10 Year Treasury Bond Fund (IEF)

iShares Lehman 20+ Year Treasury Bond Fund (TLT)

iShares Lehman Aggregate Bond Fund (AGG)

iShares Lehman TIPS Bond Fund (TIP)

An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. “GS $ InvesTop^™” and “Goldman Sachs^®” are trademarks of Goldman, Sachs & Co.

This advertising section does not constitute part of the 2004 Semi-Annual Report.


22		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

Investing involves risk, including possible loss of principal.

*2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available with out charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com: and on the Securities and Exchange Commission’s website at www.sec.gov.

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

iShares^® industrial strength investment tools from BARCLAYS GLOBAL INVESTORS

I 800 iSHARES (1 800 474 2737) www.iSHARES.COM


BGI-F037-02004		BARCLAYS

iShares^®

2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS

FEBRUARY 29, 2004

[GRAPHIC]

INDUSTRIAL STRENGTH

INVESTMENT TOOLS

iSHARES MSCI AUSTRALIA INDEX FUND

iSHARES MSCI BRAZIL INDEX FUND

iSHARES MSCI CANADA INDEX FUND

iSHARES MSCI EMERGING MARKETS INDEX FUND

iSHARES MSCI HONG KONG INDEX FUND

iSHARES MSCI MALAYSIA INDEX FUND

iSHARES MSCI MEXICO INDEX FUND

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

iSHARES MSCI SINGAPORE INDEX FUND

iSHARES MSCI SOUTH AFRICA INDEX FUND

iSHARES MSCI SOUTH KOREA INDEX FUND

iSHARES MSCI TAIWAN INDEX FUND

Table of Contents


Shareholder Letter		1
Managers’ Discussion & Analysis		3
Schedules of Investments		27
iShares MSCI Australia Index Fund		27
iShares MSCI Brazil Index Fund		30
iShares MSCI Canada Index Fund		31
iShares MSCI Emerging Markets Index Fund		33
iShares MSCI Hong Kong Index Fund		40
iShares MSCI Malaysia Index Fund		43
iShares MSCI Mexico Index Fund		44
iShares MSCI Pacific ex-Japan Index Fund		45
iShares MSCI Singapore Index Fund		50
iShares MSCI South Africa Index Fund		53
iShares MSCI South Korea Index Fund		54
iShares MSCI Taiwan Index Fund		55
Financial Statements		56
Financial Highlights		65
Notes to the Financial Statements		77
iShares Family of Funds		85

To Our Shareholders:

While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares^® Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.

With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios – and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.¹ With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.

On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.

[GRAPHIC APPEARS HERE]

Lee T. Kranefuss

President and Chairman of the Board of Directors

iShares, Inc.

¹	Morningstar Principia, BGI analysis 3/04.


SHAREHOLDER LETTER		1

To determine if the fund(s) are an appropriate investment for you, carefully consider the funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the funds’ prospectuses, which may be obtained by calling 1-800-iShares or by visiting www.ishares.com. Read the prospectus carefully before investing.

This advertising section does not constitute part of the 2004 Semi-Annual Report.


2		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Managers’ Discussion & Analysis

iSHARES^® MSCI AUSTRALIA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.98%	56.49	%	55.58	%	10.37	%	10.18	%	10.16	%	7.17	%	7.28	%	7.51	%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.98%	56.49	%	55.58	%	63.76	%	62.38	%	62.23	%	73.68	%	75.06	%	78.10	%

Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	29.35	%
Materials	[GRAPHIC APPEARS HERE]	21.12	%
Media	[GRAPHIC APPEARS HERE]	9.30	%
Real Estate	[GRAPHIC APPEARS HERE]	8.73	%
Insurance	[GRAPHIC APPEARS HERE]	4.72	%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	4.06	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	3.25	%
Diversified Financials	[GRAPHIC APPEARS HERE]	3.16	%
Energy	[GRAPHIC APPEARS HERE]	2.83	%
Transportation	[GRAPHIC APPEARS HERE]	2.43	%

The iShares MSCI Australia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.35%, while the Index returned 27.10%.

Following a twelve-year run of economic expansion, characterized by low inflation and low interest rates, Australia’s economy began to see signs of slowing during the reporting period. Thanks to low interest rates, Australians were on a buying streak that fueled an overheated housing market. In response, the central bank raised interest rates in November and again in December.


4		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The country’s strong currency also began to weigh on growth prospects. Although U.S. economic recovery increased export demand for Australia, the Australian dollar’s rapid gains against the U.S. dollar limited the potential gains. However, for U.S.-based investors, the strengthening Australian currency meant enhanced returns on Australian-based investments during the reporting period.

Despite the dampening effect of the strong currency, BHP Billiton Ltd. (9.00% of the net assets of the Fund as of February 29, 2004) posted gains, in part due to increased demand from China. Banks generally performed well, with Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (7.83%, 6.35%, and 5.91%, respectively, of the net assets of the Fund as of February 29, 2004) all posting gains during the reporting period.

The preferred and common shares of The News Corp. Ltd. (5.66% and 3.25%, respectively, of the net assets of the Fund as of February 29, 2004) declined during the reporting period, as the publication and entertainment giant’s revenues were hampered by the strong Australian currency. Woolworths Ltd. (2.34% of the net assets of the Fund as of February 29, 2004) posted a slight loss.


MANAGERS’ DISCUSSION & ANALYSIS		5

Managers’ Discussion & Analysis

iSHARES^® MSCI BRAZIL INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 2/29/04*					*Inception to 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
128.13%	127.72	%	130.21	%	(2.34	)%	(2.30	)%	0.34	%	(8.26	)%	(8.12	)%	1.24	%

Total returns for the period since inception are calculated from the inception date of the Fund (7/10/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (7/14/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Materials	[GRAPHIC APPEARS HERE]	27.72	%
Energy	[GRAPHIC APPEARS HERE]	23.88	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	12.60	%
Banks	[GRAPHIC APPEARS HERE]	11.15	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	11.14	%
Utilities	[GRAPHIC APPEARS HERE]	7.02	%
Capital Goods	[GRAPHIC APPEARS HERE]	3.97	%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	1.14	%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	0.37	%

The iShares MSCI Brazil Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 39.42%, while the Index returned 40.26%.

Brazil delivered one of the strongest equity market and currency performances in the world during the reporting period.

During the reporting period, Brazil’s stock market gained amid prospects for accelerating economic expansion. During the course of the reporting period, the central bank cut its benchmark lending rate by a full 5.5%, from 22.0% to 16.5%. President Luiz Inacio Lula da Silva continued to implement measures to spur economic growth. In September, he passed a bill aimed at overhauling the tax system, including tax breaks for investment. In November, he introduced a bill that would revamp the power industry by allowing supply and demand to determine electricity prices.


6		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The measures appeared to be taking hold, with gross domestic product growth reaching an annual rate of 6% in the fourth quarter of 2003. On the other hand, unemployment grew slightly, topping 11%, and household consumption declined. Moreover, when the central bank held interest rates steady during the first two months of 2004, citing possible inflation concerns, markets responded negatively. The possibility of higher interest rates in the U.S. also weighed on the market. For U.S. dollar-based investors, returns were enhanced by the strength of the local currency during the reporting period.

Oil company Petroleo Brasileiro SA performed well during the reporting period. Its preferred and common shares, which represented 13.13% and 10.75%, respectively, of the net assets of the Fund as of February 29, 2004, delivered solid gains. Mining giant Companhia Vale do Rio Doce (whose Class A shares and ADR shares represented 9.59% and 6.33%, respectively, of the net assets of the Fund as of February 29, 2004) posted strong gains during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		7

Managers’ Discussion & Analysis

iSHARES^® MSCI CANADA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
48.55%	49.11	%	50.05	%	11.85	%	11.88	%	12.26	%	10.56	%	10.62	%	11.33	%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
48.55%	49.11	%	50.05	%	75.02	%	75.32	%	78.28	%	122.57	%	123.54	%	135.20	%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	21.85	%
Energy	[GRAPHIC APPEARS HERE]	16.70	%
Materials	[GRAPHIC APPEARS HERE]	16.34	%
Insurance	[GRAPHIC APPEARS HERE]	8.63	%
Technology Hardware & Equipment	[GRAPHIC APPEARS HERE]	7.38	%
Diversified Financials	[GRAPHIC APPEARS HERE]	4.56	%
Utilities	[GRAPHIC APPEARS HERE]	4.00	%
Transportation	[GRAPHIC APPEARS HERE]	3.61	%
Media	[GRAPHIC APPEARS HERE]	2.83	%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	2.61	%

The iShares MSCI Canada Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 21.02%, while the Index returned 21.64%.

Although the Canadian market entered the reporting period better poised than many for economic recovery, its growth stalled during the past six months. The country battled a series of unforeseen events, such as SARS and Mad Cow Disease, but it was the strength of its currency that put a stranglehold on economic growth.


8		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Canada depends heavily on exports to the U.S., which account for 85% of Canada’s exports, for its economic prosperity. As the Canadian currency rose against the U.S. dollar, its export levels diminished. Export levels to the U.S. shrank in each of the three final months of 2003, as the U.S. turned instead to suppliers in China and Mexico.

For the entire year of 2003, gross domestic product growth was a slight 1.5%. In response to the anemic growth rate, the central bank attempted to stimulate the economy by lowering its benchmark lending rate in January, from 2.75% to 2.50%.

Among the Fund’s ten largest holdings, the strongest performer far and away was Nortel Networks Corp., the second largest holding at 6.62% of the net assets of the Fund as of February 29, 2004. Participating in a global rebound in the telecommunications industry, the company posted triple-digit gains during the reporting period.

Financial companies also moved in step with their counterparts around the world. Bank of Montreal and Canadian Imperial Bank of Commerce (4.28% and 4.00%, respectively, of the net assets of the Fund as of February 29, 2004) both performed well during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		9

Managers’ Discussion & Analysis

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

Performance as of 2/29/04


Total Returns
*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*
71.66%	73.17%	69.79%

“Total returns” represent the total change in value of an investment over the period indicated and are calculated from the inception date of the Fund (4/7/03).

Certain sectors and markets performed exceptionally well based on market conditions during the six-month and since inception periods. Investors should not expect that such exceptional returns will be repeated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (4/11/03), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An Index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.


	TOP 10 FUND ALLOCATIONS BY COUNTRY (% of Net Assets)
South Korea	[GRAPHIC APPEARS HERE]	17.78	%
South Africa	[GRAPHIC APPEARS HERE]	14.36	%
Taiwan	[GRAPHIC APPEARS HERE]	11.89	%
Brazil	[GRAPHIC APPEARS HERE]	8.15	%
Mexico	[GRAPHIC APPEARS HERE]	7.49	%
Russia	[GRAPHIC APPEARS HERE]	5.16	%
India	[GRAPHIC APPEARS HERE]	5.02	%
China	[GRAPHIC APPEARS HERE]	4.76	%
Hong Kong	[GRAPHIC APPEARS HERE]	4.52	%
Thailand	[GRAPHIC APPEARS HERE]	3.97	%

The iShares MSCI Emerging Markets Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 28.40%, while the Index returned 28.41%.

Emerging markets generally delivered healthy gains during the reporting period. Because many emerging markets depend on exports to the U.S. and to neighboring countries for their economic livelihood, the improving economic conditions in the U.S. and other major markets helped to buoy market returns. For some emerging markets, however, currency strength against the U.S. dollar dampened export trade somewhat. For U.S.-based investors, however, the weakness of the U.S. dollar boosted returns in these emerging markets.

South Korea overcame a number of obstacles during the reporting period to deliver gains. Early in the period, the International Monetary Fund cut its growth outlook for the country down from 5.0% to 2.5%. News of OPEC’s plans to cut oil production was also negative for Korea, which is the world’s fourth-largest oil importer. However, as a major exporter of electronics, South Korea benefited from signs of recovery in the U.S. during the reporting period. The world’s second-largest chipmaker and the largest Fund holding at 7.66% of net assets as of February 29, 2004, Samsung Electronics Co. Ltd. benefited from the increased export demand. In general, the telecommunications sector rebounded worldwide during the reporting period. Hong Kong’s China Mobile Ltd. participated in this trend, (1.92% of the net assets of the Fund as of February 29, 2004) posting gains for the reporting period.


10		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The Taiwanese market also advanced during the reporting period. Because of Taiwan’s dependence on exports, signs of increasing global growth helped boost the equity market. Although strength in the U.S. helped Taiwan’s export market, growing economic strength in the U.S., China and Japan also contributed to export growth, helping Taiwan’s local economy. In December alone, Taiwan’s export orders rose 20% to a record $15.7 billion on stronger Chinese and U.S. demand for computer chips, flat-panel displays and other electronic goods.

South Africa, on the other hand, found its growth hindered by the strength of its currency, which gained against the U.S. dollar during the reporting period. Record high gold prices helped to mitigate the problem for Anglo American PLC (3.93% of the Fund’s net assets as of February 29, 2004), the largest mining company in the world, although it did implement cost-cutting measures to counter the currency’s rise and deliver positive returns.


MANAGERS’ DISCUSSION & ANALYSIS		11

Managers’ Discussion & Analysis

iSHARES^® MSCI HONG KONG INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.79%	55.04	%	57.49	%	7.62	%	7.61	%	8.35	%	1.22	%	1.27	%	3.41	%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception To 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.79%	55.04	%	57.49	%	44.35	%	44.31	%	49.31	%	10.13	%	10.60	%	30.60	%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Real Estate	[GRAPHIC APPEARS HERE]	26.39	%
Banks	[GRAPHIC APPEARS HERE]	16.10	%
Capital Goods	[GRAPHIC APPEARS HERE]	15.20	%
Utilities	[GRAPHIC APPEARS HERE]	14.96	%
Diversified Financials	[GRAPHIC APPEARS HERE]	9.84	%
Retailing	[GRAPHIC APPEARS HERE]	4.89	%
Transportation	[GRAPHIC APPEARS HERE]	4.69	%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	2.16	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	2.08	%
Media	[GRAPHIC APPEARS HERE]	1.58	%

The iShares MSCI Hong Kong Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.28%, while the Index returned 26.60%.

The Hong Kong market delivered solid gains during the reporting period. After successfully fighting off the effects of global economic slowdown and the SARS virus in the past few years, the Hong Kong economy rebounded at a healthy pace.


12		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Unlike many of its Asian neighbors who depend heavily on electronics-related exports to drive their economies, Hong Kong is largely a services-based economy. Generally as its ties to mainland China strengthened, so did its role as the provider of service-based industries, such as tourism, financial services, and professional services.

Driving much of the market’s returns during the reporting period was the real estate market. The largest holdings in the Fund, Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd., and Sun Hung Kai Properties Ltd. (13.98%, 10.19%, and 9.33%, respectively, of the net assets of the Fund as of February 29, 2004) all posted gains during the reporting period. Swire Pacific Ltd. Class A shares (4.57% of the Fund’s net assets as of February 29, 2004) and BOC Hong Kong (Holdings) Ltd. (4.85% of the net assets of the Fund as of February 29, 2004) also performed well during the reporting period, logging some of the best gains among the Fund’s ten largest holdings.

As the economic landscape strengthened in Hong Kong and the region, utilities companies also gained ground. Hong Kong & China Gas Co. Ltd. and Hongkong Electric Holdings Ltd. (4.72% and 4.07%, respectively, of the Fund’s net assets as of February 29, 2004) both performed well during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		13

Managers’ Discussion & Analysis

iSHARES^® MSCI MALAYSIA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
39.17%	44.75	%	41.01	%	21.22	%	16.80	%	19.93	%	(5.53	)%	(5.46	)%	(4.30	)%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
39.17%	44.75	%	41.01	%	161.76	%	117.38	%	148.09	%	(36.45	)%	(36.06	)%	(29.56	)%

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Malaysia Fund, which has a NAV determined prior to the opening of the regular trading day on the American Stock Exchange (the “Amex”), the market return will use the midpoint of the bid/ask spread as of the opening of regular trading on the Amex. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	22.07	%
Hotels Restaurants & Leisure	[GRAPHIC APPEARS HERE]	11.93	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	11.62	%
Capital Goods	[GRAPHIC APPEARS HERE]	11.21	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	9.94	%
Utilities	[GRAPHIC APPEARS HERE]	9.94	%
Transportation	[GRAPHIC APPEARS HERE]	7.06	%
Diversified Financials	[GRAPHIC APPEARS HERE]	3.88	%
Automobiles & Components	[GRAPHIC APPEARS HERE]	3.36	%
Media	[GRAPHIC APPEARS HERE]	2.79	%

The iShares MSCI Malaysia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 20.35%, while the Index returned 21.18%.

After struggling in the last reporting period with the repercussions of a sluggish global economy, the SARS virus and the terrorist bombings in Bali, the Malaysian market rebounded during the reporting period.


14		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Malaysia’s economy historically has relied heavily on exports and tourism, and therefore benefited during the reporting period from the upswing in economic growth both in the U.S. and among its Asian neighbors. During the reporting period, Genting Bhd (4.14% of the net assets of the Fund as of February 29, 2004), Malaysian International Shipping Corp. Bhd. (3.73% of the net assets of the Fund as of February 29, 2004), and Sime Darby Bhd. (4.80% of the net assets of the Fund as of February 29, 2004) benefited from the improved economic environment and increase in foreign demand.

Financial companies also were buoyed by increased economic activity. The largest Fund holding at 10.10% of net assets as of February 29, 2004, Malayan Banking Bhd., posted gains for the reporting period. Commerce Asset Holdings Bhd. (4.63% of the Fund’s net assets as of February 29, 2004) also performed well.

During the last two decades, Malaysia’s export market has shifted from commodities toward electronics, its leading export today. Together, electronic parts and semiconductors account for roughly 40% of Malaysia’s export. Even so, the country remains a leading exporter of commodity products, including palm oil. IOI Corp. Bhd., a major producer of palm oil and rubber, represented 4.33% of the Fund’s net assets as of February 29, 2004 and logged healthy gains during the reporting period, thanks to increased regional demand.


MANAGERS’ DISCUSSION & ANALYSIS		15

Managers’ Discussion & Analysis

iSHARES^® MSCI MEXICO INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
70.65%	71.53	%	64.41	%	14.20	%	14.67	%	15.49	%	11.33	%	11.36	%	13.20	%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
70.65%	71.53	%	64.41	%	94.25	%	98.28	%	105.43	%	135.18	%	135.81	%	168.59	%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Telecommunication Services	[GRAPHIC APPEARS HERE]	43.40	%
Materials	[GRAPHIC APPEARS HERE]	12.89	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	10.76	%
Media	[GRAPHIC APPEARS HERE]	7.92	%
Banks	[GRAPHIC APPEARS HERE]	6.04	%
Capital Goods	[GRAPHIC APPEARS HERE]	4.70	%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	4.66	%
Retailing	[GRAPHIC APPEARS HERE]	4.42	%
Household & Personal Products	[GRAPHIC APPEARS HERE]	2.62	%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	1.52	%

The iShares MSCI Mexico Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as measured by the MSCI Mexico Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 31.96%, while the Index returned 28.51%.

Regulatory constraints, such as those imposed by the Securities and Exchange Commission and Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “5/50 Rule”, precludes the sum of all the securities weighted over 5% in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of February 29, 2004, nearly 80% of the Index was represented by securities each having a weighting of 5% or more of the Index. To comply with the 5/50 Rule, the Fund was obligated to underweight some of these stocks relative to


16		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

the benchmark, and overweight its investment in other stocks. In general, the overweighted securities outperformed the benchmark returns. This had a positive impact on the Fund’s performance relative to the Index’s and was a major factor in the Fund’s ability to outperform the Index by 3.45 percentage points during the reporting period.

The Mexican economy experienced a more moderate recovery than most international markets during the reporting period. Manufacturing levels remained fairly stagnant, in part due to lack of demand from the U.S., while construction edged up. In October, the central bank revised its forecast for 2003 economic growth downward, from 2.0% to 1.5%, in the face of lower demand for Mexican exports.

Not all sectors were slow, however. Retail sales figures released in late September showed growth levels that exceeded consensus expectations. Rising commodities prices helped boost returns for mining companies.

Telecommunications companies generally moved in step during the reporting period with their counterparts around the world. The largest Fund holding at 21.89% of net assets as of February 29, 2004, America Movil SA de CV Series L, was also a strong performer, rebounding from previous reporting periods. Telefonos de Mexico SA de CV Series L (18.05% of the net assets of the Fund as of February 29, 2004) also posted gains. Financial companies also echoed the performance of their international counterparts. Grupo Financiero BBVA Bancomer SA de CV Class B (4.77% of the net assets of the Fund as of February 29, 2004) was an example, delivering solid gains during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		17

Managers’ Discussion & Analysis

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 2/29/04*					*Inception to 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.94%	55.40	%	55.91	%	22.28	%	22.81	%	22.41	%	60.35	%	61.99	%	60.52	%

Total returns for the period since inception are calculated from the inception date of the Fund (10/25/01). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (10/26/01), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	FUND ALLOCATIONS BY COUNTRY (% of Net Assets)
Australia	[GRAPHIC APPEARS HERE]	63.90	%
Hong Kong	[GRAPHIC APPEARS HERE]	22.27	%
Singapore	[GRAPHIC APPEARS HERE]	10.51	%
New Zealand	[GRAPHIC APPEARS HERE]	2.95	%

The iShares MSCI Pacific ex-Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific Free ex-Japan Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.50%, while the Index returned 26.35%.

The markets comprising the Index – Australia, Hong Kong, New Zealand and Singapore, all posted gains during the reporting period, responding to global economic recovery.

Australia’s economy was hemmed in by its strong currency, as a rising Australian dollar made Australian goods more expensive to its export market. For U.S.-based investors, however, the stronger currency boosted returns, and the Australian market contributed the most, in U.S dollar terms, to the Index’s overall performance during the reporting period. BHP Billiton Ltd. (5.81% of the net assets of the Fund as of February 29, 2004) logged gains despite the strong currency, thanks to growing demand from China. The financial sector also performed well, with Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (5.06%, 4.10% and 3.81%, respectively, of the Fund’s net assets as of February 29, 2004) all posting gains during the reporting period.


18		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

For Hong Kong, the real estate market was the main driver of performance. The sector continued to benefit from the government’s efforts to reverse deflation in the property market. Hutchison Whampoa Ltd. and Cheung Kong (Holdings) Ltd. (2.96% and 2.36%, respectively, of the net assets of the Fund as of February 29, 2004) both posted gains. The gains posted by Sun Hung Kai Properties Ltd. (2.05% of the net assets of the Fund as of February 29, 2004) made it the strongest performer among the Fund’s ten largest holdings during the reporting period.

Singapore’s economy relies largely on exports, particularly those to the U.S. The improving economic climate in the U.S., therefore, helped the Singapore market as demand for exports grew. Its neighboring markets, including Japan and China, also helped to buoy its export market as their respective economies strengthened.


MANAGERS’ DISCUSSION & ANALYSIS		19

Managers’ Discussion & Analysis

iSHARES^® MSCI SINGAPORE INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.75%	58.79	%	54.39	%	4.13	%	4.50	%	3.84	%	(6.18	)%	(6.03	)%	(5.58	)%


Cumulative Total Returns
*Year Ended 2/29/04*					*Five Years Ended 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
55.75%	58.79	%	54.39	%	22.41	%	24.60	%	20.71	%	(39.85	)%	(39.08	)%	(36.70	)%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	37.15	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	12.01	%
Transportation	[GRAPHIC APPEARS HERE]	11.09	%
Capital Goods	[GRAPHIC APPEARS HERE]	10.88	%
Real Estate	[GRAPHIC APPEARS HERE]	9.66	%
Technology Hardware & Equipment	[GRAPHIC APPEARS HERE]	5.57	%
Media	[GRAPHIC APPEARS HERE]	3.42	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	2.61	%
Semiconductors & Semiconductor Equipment	[GRAPHIC APPEARS HERE]	2.42	%
Diversified Financials	[GRAPHIC APPEARS HERE]	2.27	%

The iShares MSCI Singapore Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Singaporean market, as measured by the MSCI Singapore Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 21.01%, while the Index returned 20.69%.

Singapore shrugged off the difficulties it faced in previous reporting periods to deliver gains during the reporting period. Because Singapore’s economy historically has relied heavily on its export market, particularly to the U.S., it responded positively to signs of renewed economic strength in the U.S. economy.


20		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The increased export demand translated into gains for companies like Venture Corp. Ltd. (3.96% of the net assets of the Fund as of February 29, 2004) and Keppel Corp. Ltd. (4.03% of the net assets of the Fund as of February 29, 2004). Non-exporting companies also posted gains. Singapore Telecommunications Ltd. (12.01% of the net assets of the Fund as of February 29, 2004) and City Developments Ltd. (3.70% of the net assets of the Fund as of February 29, 2004) were among the strongest performers within the Fund’s ten largest holdings during the reporting period.

Financial companies also generally performed well during the reporting period, as the economic environment improved. The largest Fund holding at 14.27% of net assets as of February 29, 2004, United Overseas Bank Ltd., logged gains, as did DBS Group Holdings Ltd. (13.53% of the net assets of the Fund as of February 29, 2004) and Oversea-Chinese Banking Corp. Ltd. (9.35% of the net assets of the Fund as of February 29, 2004).

Singapore Airlines Ltd. (4.27% of the Fund’s net assets as of February 29, 2004), having overcome a drop-off in business in the wake of the SARS virus was dealt another blow during the reporting period in the form of the November terrorist bombings in Istanbul. Because Singapore Airlines operates regular flights to Istanbul, it suffered a short-term setback, but managed to finish the reporting period in positive territory.


MANAGERS’ DISCUSSION & ANALYSIS		21

Managers’ Discussion & Analysis

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 2/29/04*					*Inception to 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
54.70%	56.16	%	57.44	%	50.13	%	51.13	%	53.27	%	54.54	%	55.64	%	57.92	%

Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (2/7/03), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Materials	[GRAPHIC APPEARS HERE]	48.39	%
Insurance	[GRAPHIC APPEARS HERE]	10.47	%
Banks	[GRAPHIC APPEARS HERE]	9.62	%
Energy	[GRAPHIC APPEARS HERE]	7.57	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	5.83	%
Capital Goods	[GRAPHIC APPEARS HERE]	4.10	%
Retailing	[GRAPHIC APPEARS HERE]	2.78	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	2.73	%
Diversified Financials	[GRAPHIC APPEARS HERE]	1.98	%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	1.62	%

The iShares MSCI South Africa Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South African market, as measured by the MSCI South Africa Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.83%, while the Index returned 28.23%.

The South African market posted gains during the reporting period. For U.S.-based investors, returns were enhanced by the local currency’s strength against the U.S. dollar.

The South African economy historically has been driven by metals, mining, and materials companies. Despite record high prices for gold, these companies came under pressure during the reporting period. Because these companies generally make their revenues in U.S. dollars but incur costs in South African rand, they have been adversely affected by the local currency’s rapid gains. From its low against the U.S. dollar in December 2002 through November 2003, the currency doubled against the U.S. dollar.


22		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The currency’s strength severely hindered companies like Anglo American PLC, the largest mining company in the world and the largest Fund holding at 24.70% of net assets as of February 29, 2004, which implemented cost-cutting measures to counter the rand’s rise. Other companies cut profit forecasts and pared back on expansion plans due to the pace of cost increases. In December, the currency briefly reversed course, providing relief, but showed strength again in February.

Although Anglo American posted gains for the reporting period, other top ten Fund holdings did not fare as well. Impala Platinum Holdings Ltd., AngloGold Ltd., and Gold Fields Ltd. (4.81%, 4.27%, and 3.84%, respectively, of the net assets of the Fund as of February 29, 2004) all declined.

Apart from the metals and mining-related companies, financial companies generally performed well, with Standard Bank Group Ltd. (5.52% of the net assets of the Fund as of February 29, 2004) logging gains. Telecommunications company MTN Group Ltd. (4.23% of the net assets of the Fund as of February 29, 2004) performed in line with its telecommunications counterparts around the world, and was by far the best performer among the ten largest holdings in the Fund for the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		23

Managers’ Discussion & Analysis

iSHARES^® MSCI SOUTH KOREA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns											CUMULATIVE TOTAL RETURNS
*Year Ended 2/29/04*					*Inception to 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
63.05%	62.17	%	69.46	%	8.56	%	8.89	%	8.88	%	36.77	%	38.35	%	38.30	%

Total returns for the period since inception are calculated from the inception date of the Fund (5/9/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the South Korea Fund, the NAV of which is determined prior to the opening of the regular trading day on the American Stock Exchange (the “AMEX”), the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the AMEX. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (5/12/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Semiconductors & Semiconductor Equipment	[GRAPHIC APPEARS HERE]	25.74	%
Banks	[GRAPHIC APPEARS HERE]	11.94	%
Materials	[GRAPHIC APPEARS HERE]	10.87	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	8.90	%
Technology Hardware & Equipment	[GRAPHIC APPEARS HERE]	7.96	%
Automobiles & Components	[GRAPHIC APPEARS HERE]	7.69	%
Capital Goods	[GRAPHIC APPEARS HERE]	4.81	%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	4.44	%
Utilities	[GRAPHIC APPEARS HERE]	3.20	%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	2.67	%

The iShares MSCI South Korea Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South Korean market, as measured by the MSCI South Korea Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 19.85%, while the Index returned 22.10%.

Regulatory constraints, such as those imposed by the Securities and Exchange Commission and Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “Single Issuer Rule”, generally prohibits a fund from investing more than 25% of the value of a fund’s total assets in the securities of a single issuer. To comply with this Rule, the Fund was obligated to underweight its investment in the Index’s largest constituent, Samsung Electronics Co. Ltd., which outperformed the benchmark during the reporting period. This had a negative impact on the Fund’s performance relative to the Index’s, and was a major factor in the Fund’s underperformance of the Index by 2.25 percentage points.


24		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The South Korean market managed to overcome difficulties on several fronts to deliver gains during the reporting period. Early in the period, the market stumbled as the International Monetary Fund cut its growth outlook for the country down from 5.0% to 2.5%. News of OPEC’s plans to cut oil production compounded the market’s woes, as the production cuts would have meant higher oil prices, which in turn would have raised costs for energy-using companies, slowing their earnings growth. Because it has no natural oil reserves, Korea is the world’s fourth-largest oil importer.

Another concern for the Korean economy has been a slump in domestic demand in the face of high debt payments and tightened lending rules. A report released in October showed that one in seven South Koreans were at least three months overdue on debt payments. In an effort to reverse the trend, the Korean government boosted spending and cut taxes during the reporting period.

Countering these problems, exports rose during the reporting period at their fastest clip in more than three years, as demand for cars, semiconductors and computers accelerated in the U.S., China, and Europe. The world’s second-largest chipmaker and the largest Fund holding at 24.73% of net assets as of February 29, 2004, Samsung Electronics Co. Ltd., benefited from the high export demand. Its affiliate, Samsung SDI Co. Ltd. (4.66% of the net assets of the Fund as of February 29, 2004), which manufactures plasma display panels, showed even stronger gains during the reporting period. Steel manufacturer POSCO (7.42% of the net assets of the Fund as of February 29, 2004), continued to benefit from Korea’s strong currency as it converted foreign gains back into the local currency.


MANAGERS’ DISCUSSION & ANALYSIS		25

Managers’ Discussion & Analysis

iSHARES^® MSCI TAIWAN INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns											Cumulative Total Returns
*Year Ended 2/29/04*					*Inception to 2/29/04*						*Inception to 2/29/04*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
60.32%	64.83	%	62.65	%	(10.12	)%	(9.86	)%	(9.16	)%	(32.59	)%	(31.87	)%	(29.85	)%

Total returns for the period since inception are calculated from the inception date of the Fund (6/20/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Taiwan Fund, the NAV of which is determined prior to the opening of the regular trading day on the American Stock Exchange (the “AMEX”), the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the AMEX. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (6/23/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Semiconductors & Semiconductor Equipment	[GRAPHIC APPEARS HERE]	27.34	%
Technology Hardware & Equipment	[GRAPHIC APPEARS HERE]	25.55	%
Banks	[GRAPHIC APPEARS HERE]	13.95	%
Materials	[GRAPHIC APPEARS HERE]	13.09	%
Insurance	[GRAPHIC APPEARS HERE]	4.38	%
Capital Goods	[GRAPHIC APPEARS HERE]	3.63	%
Telecommunication Services	[GRAPHIC APPEARS HERE]	2.48	%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	2.12	%
Diversified Financials	[GRAPHIC APPEARS HERE]	2.03	%
Transportation	[GRAPHIC APPEARS HERE]	1.62	%

The iShares MSCI Taiwan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Taiwanese market, as measured by the MSCI Taiwan Index (the “Index”). For the six-month period ended February 29, 2004 the Fund returned 16.53%, while the Index returned 17.20%.

Taiwanese equities advanced during the reporting period, buoyed by signs of global economic growth. Because of Taiwan’s dependence on exports, growing economic strength in the U.S., China and Japan helped to boost the local economy. In December, Taiwan’s export orders rose 20% to a record $15.7 billion on stronger Chinese and U.S. demand for computer chips, flat-panel displays and other electronic goods. The increased levels of exports, in turn, prompted companies to increase hiring, which resulted in an annualized unemployment rate of 4.7%, a two-year low. Additionally, government stimulus measures, a boom in real estate and an increase in domestic demand combined to create a strong backdrop for growth.


26		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

During the reporting period, technology stocks generally performed well in response to the rise in export demand. United Microelectronics Corp. (6.53% of the net assets of the Fund as of February 29, 2004), the world’s second-largest supplier of made-to-order chips, was chosen over IBM to make advanced telecommunications chips for Xilinx Inc., the world’s largest seller of programmable semiconductors. AU Optronics Corp. (2.92% of the net assets of the Fund as of February 29, 2004) also posted solid gains during the reporting period.

China Steel Corp. (3.41% of the net assets of the Fund as of February 29, 2004), Taiwan’s largest steel producer, benefited from strong demand during the reporting period. In February, the company rallied nearly 20% in U.S. dollar terms when it announced plans to raise prices on six types of products beginning in April.

Financial company Cathay Financial Holdings Co. Ltd. (4.38% of the net assets of the Fund as of February 29, 2004) benefited from increased real estate activity and improving economic conditions. The company was a strong performer among the Fund’s ten largest holdings during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		27

Schedule of Investments (Unaudited)

iSHARES MSCI AUSTRALIA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 93.87%
National Australia Bank Ltd.	676,040	$	16,117,399
BHP Billiton Ltd.	1,684,318		15,932,306
Commonwealth Bank of Australia	566,952		13,857,840
Australia and New Zealand Banking Group Ltd.	809,600		11,237,397
Westpac Banking Corp. Ltd.	804,642		10,460,843
News Corp. Ltd. (The)	613,342		5,759,136
Woolworths Ltd.	457,823		4,143,427
Rio Tinto Ltd.	140,377		3,912,080
Wesfarmers Ltd.	168,162		3,567,998
Telstra Corp. Ltd.	965,848		3,562,056
AMP Ltd.	822,193		3,108,379
Foster’s Group Ltd.	917,475		3,093,426
Coles Myer Ltd.	494,381		2,975,229
Westfield Trust	976,967		2,668,377
Insurance Australia Group Ltd.	757,538		2,630,153
QBE Insurance Group Ltd.	301,259		2,566,098
Suncorp-Metway Ltd.	241,280		2,528,047
Woodside Petroleum Ltd.	209,984		2,465,840
Macquarie Bank Ltd.	95,875		2,448,485
Rinker Group Ltd.	424,768		2,303,940
Amcor Ltd.	385,536		2,293,419
Stockland Trust Group	531,918		2,199,751
Alumina Ltd.	507,469		2,153,457
WMC Resources Ltd.¹	507,712		2,048,723
General Property Trust	883,328		2,030,965
Macquarie Infrastructure Group	873,959		1,995,937
Westfield Holdings Ltd.	190,336		1,894,413
Australian Gas Light Co. Ltd.	204,416		1,797,976
Brambles Industries Ltd.	433,856		1,777,478
TABCORP Holdings Ltd.	188,096		1,642,820
BHP Steel Ltd.	343,040		1,564,215
Orica Ltd.	125,888		1,341,350
CSL Ltd.	85,568		1,320,400
Newcrest Mining Ltd.	146,304		1,298,130
Lend Lease Corp. Ltd.	167,558		1,279,866
Origin Energy Ltd.	295,488		1,278,989
Santos Ltd.	265,280		1,242,388
Boral Ltd.	258,560		1,224,881
Mirvac Group	306,176		1,089,021
James Hardie Industries NV	207,744		1,073,909
Coca-Cola Amatil Ltd.	205,888		1,046,841
John Fairfax Holdings Ltd.	391,404		1,023,739
Centro Properties Group	283,712		919,372
Investa Property Group	604,562		909,577
Patrick Corporation Ltd.	222,912		858,219
Mayne Group Ltd.	340,548		840,799
Macquarie Goodman Industrial Trust	634,560		822,519
Toll Holdings Ltd.	96,832		725,441
Transurban Group	208,192		722,837
TAB Ltd.	201,792		708,401
PaperlinX Ltd.	198,656		689,729
Sonic Healthcare Ltd.	108,096		667,212
Southcorp Ltd.	283,136		650,992
Gandel Retail Trust	580,544		622,607
Lion Nathan Ltd.	130,368		605,524
Australian Stock Exchange Ltd.	45,760		593,849
CSR Ltd.	421,184		591,435
Publishing & Broadcasting Ltd.	58,432		557,679
Leighton Holdings Ltd.	62,848		530,970
Commonwealth Property Office Fund	577,984		521,754
Harvey Norman Holdings Ltd.	234,176		505,900
Computershare Ltd.	191,296		500,345
Deutsche Office Trust	505,600		433,006
Ansell Ltd.	77,710		420,899
Cochlear Ltd.	23,488		417,716
OneSteel Ltd.	241,216		388,970
Iluka Resources Ltd.	107,456		343,238
Futuris Corp. Ltd.	257,792		338,129
Aristocrat Leisure Ltd.	139,072		258,595

TOTAL COMMON STOCKS (Cost: $128,309,287)			166,102,838

PREFERRED STOCKS – 5.66%
News Corp. Ltd. (The)	1,211,748		10,013,038

TOTAL PREFERRED STOCKS (Cost: $8,844,715)			10,013,038


28		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI AUSTRALIA INDEX FUND

February 29, 2004


*Security*	Shares or Principal		*Value*
SHORT-TERM INVESTMENTS – 20.02%

MONEY MARKET FUNDS – 9.59%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares^2,3		11,520,935	$	11,520,935
Barclays Global Investors Funds
Prime Money Market Fund,
Institutional Shares^2,3		4,252,624		4,252,624
BlackRock Temp Cash Money
Market Fund²		197,149		197,149
Short-Term Investment Co. -
Prime Money Market Portfolio,
Institutional Shares²		994,364		994,364

				16,965,072
FLOATING RATE NOTES – 5.55%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	193,301		193,295
1.05%, 09/15/04^2,4		386,602		386,581
1.05%, 10/12/04^2,4		193,301		193,289
1.14%, 08/23/04^2,4		193,301		193,381
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		289,952		289,925
1.38%, 11/22/04²		96,651		96,656
1.40%, 10/29/04²		386,602		386,596
CC USA Inc.
1.05%, 04/19/04^2,4		170,105		170,104
1.06%, 05/24/04^2,4		386,602		386,593
1.09%, 07/15/04^2,4		193,301		193,327
1.51%, 02/15/05^2,4		251,291		251,676
Dorada Finance Inc.
1.05%, 05/20/04^2,4		386,602		386,589
1.24%, 08/09/04²		96,651		96,644
1.48%, 01/18/05^2,4		289,952		289,939
Five Finance Inc.
1.06%, 04/15/04^2,4		193,301		193,301
HBOS Treasury Services PLC
1.16%, 01/24/05²		386,602		386,602
Holmes Financing PLC
1.05%, 04/15/04²		38,660		38,660


*Security*	*Principal*		*Value*
K2 USA LLC
1.05%, 08/16/04^2,4	$	96,651	$	96,644
1.05%, 09/27/04^2,4		417,530		417,494
1.06%, 05/17/04²		193,301		193,299
1.07%, 04/13/04²		193,301		193,300
1.46%, 01/12/05^2,4		193,301		193,284
Links Finance LLC
1.05%, 06/28/04²		193,301		193,289
1.06%, 07/20/04²		154,641		154,629
1.07%, 03/29/04²		193,301		193,301
1.07%, 05/04/04²		193,301		193,299
Nationwide Building Society
1.09%, 07/23/04^2,4		289,952		289,952
1.17%, 12/28/04^2,4		386,602		386,602
Northern Rock PLC
1.11%, 01/13/05^2,4		367,272		367,272
Permanent Financing PLC
1.06%, 12/10/04²		193,301		193,301
Sigma Finance Inc.
1.06%, 07/01/04²		193,301		193,285
1.06%, 07/20/04²		193,301		193,286
1.09%, 10/07/04²		386,602		386,556
1.24%, 08/06/04²		96,651		96,646
Tango Finance Corp.
1.05%, 01/18/05^2,4		170,105		170,090
1.06%, 07/15/04^2,4		115,981		115,966
1.07%, 02/25/05^2,4		216,497		216,454
1.10%, 07/06/04^2,4		115,981		115,977
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		193,301		193,280
1.32%, 02/04/05^2,4		96,651		96,633
White Pine Finance LLC
1.04%, 08/26/04^2,4		193,301		193,287
1.06%, 04/20/04^2,4		193,301		193,301
1.06%, 07/06/04^2,4		231,961		231,954
1.06%, 11/15/04^2,4		231,961		231,961

				9,827,500


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI AUSTRALIA INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
COMMERCIAL PAPER – 2.32%
Amsterdam Funding Corp.
1.03%, 03/03/04²	$	289,952	$	289,935
Corporate Asset Funding Corp.
1.03%, 03/16/04²		193,301		193,218
1.05%, 05/21/04²		201,033		200,560
CRC Funding LLC
1.03%, 03/26/04²		154,641		154,530
Delaware Funding Corp.
1.02%, 03/16/04²		390,878		390,712
1.03%, 03/05/04²		172,776		172,757
Edison Asset Securitization
1.03%, 03/03/04²		289,952		289,935
Eureka Securitization Inc.
1.04%, 04/14/04²		231,961		231,666
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		135,311		135,276
Galaxy Funding Inc.
1.05%, 05/17/04²		193,301		192,869
Gemini Securitization Corp.
1.04%, 04/19/04²		96,651		96,514
GIRO Funding US Corp.
1.05%, 05/19/04²		96,651		96,428
Jupiter Securitization Corp.
1.03%, 03/24/04²		193,301		193,174
Liberty Street Funding Corp.
1.03%, 03/10/04²		77,320		77,301
New Center Asset Trust
1.04%, 03/01/04²		96,651		96,651
Park Avenue Receivables Corp.
1.03%, 03/22/04²		158,835		158,740
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		386,602		386,446
1.04%, 05/20/04²		96,651		96,427
Receivables Capital Corp.
1.03%, 03/15/04²		421,396		421,228
Windmill Funding Corp.
1.03%, 03/05/04²		220,750		220,725

				4,095,092
TIME DEPOSITS – 1.81%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		386,602		386,602
1.33%, 02/10/05²		193,301		193,274
1.39%, 02/02/05²		193,301		193,274
1.40%, 10/25/04²		386,602		386,564
Bank of New York
1.39%, 11/01/04²		386,602		386,576
Bank of Novia Scotia
1.24%, 10/07/04²		289,952		289,934
1.42%, 10/29/04²		289,952		289,966
SunTrust Bank
1.01%, 03/01/04²		637,894		637,894
Toronto-Dominion Bank
1.34%, 02/10/05²		154,641		154,619
1.41%, 11/01/04²		289,952		289,932

				3,208,635
U.S. GOVERNMENT AGENCY NOTES – 0.53%
Federal Home Loan
Mortgage Corp.
1.15%, 05/12/04²		289,952		289,285
1.28%, 08/19/04²		154,641		153,701
Federal National Mortgage Association
1.28%, 08/20/04²		502,583		499,509

				942,495
REPURCHASE AGREEMENTS – 0.22%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		386,602		386,602

				386,602

TOTAL SHORT-TERM INVESTMENTS (Cost: $35,425,396)				35,425,396

TOTAL INVESTMENTS IN SECURITIES – 119.55% (Cost $172,579,398)				211,541,272
Other Assets, Less Liabilities – (19.55%)				(34,591,523	)

NET ASSETS – 100.00%			$	176,949,749

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


30		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI BRAZIL INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS AND RIGHTS – 28.24%

Petroleo Brasileiro SA	919,300	$	28,502,246
Companhia Vale do Rio Doce ADR	289,738		16,775,830
Unibanco Holdings SA	159,251,000		7,272,235
Companhia Siderurgica Nacional	113,169,000		7,227,273
Centrais Eletricas Brasileiras SA	455,891,000		5,102,847
Souza Cruz SA	420,700		4,420,058
Companhia de Saneamento Basico do Estado de Sao Paulo	34,870,000		1,830,600
Companhia Siderurgica de Tubarao	53,890,000		1,776,103
Brasil Telecom Participacoes SA	270,084,000		1,659,915
Tele Norte Leste Participacoes SA	25,360,000		291,695
Tele Centro Oeste Celular Participacoes SA Rights	5,808,690		40

TOTAL COMMON STOCKS AND RIGHTS (Cost: $63,853,167)			74,858,842

PREFERRED STOCKS – 70.65%

Petroleo Brasileiro SA	1,236,300		34,807,416
Companhia Vale do Rio Doce Class A	507,200		25,425,305
Companhia de Bebidas das Americas	79,884,000		21,366,398
Banco Itau Holding Financeira SA	124,264,000		11,945,984
Banco Bradesco SA	2,062,085,000		10,336,985
Tele Norte Leste Participacoes SA	670,772,000		9,857,182
Embraer-Empresa Brasileira de Aeronautica SA	1,172,943		8,872,080
Brasil Telecom Participacoes SA	929,444,000		7,084,520
Aracruz Celulose SA Class B	1,902,000		6,791,691
Companhia Energetica de Minas Gerais	378,815,467		6,763,402
Gerdau SA	253,689		5,426,549
Telesp Celular Participacoes SA¹	1,597,784,000		4,772,773
Usinas Siderurgicas de Minas Gerais SA Class A	412,100		4,704,661
Sadia SA	2,536,000		3,744,137
Tele Centro Oeste Celular Participacoes SA	980,238,000		3,315,135
Centrais Eletricas Brasileiras SA Class B	268,499,000		3,180,502
Companhia Brasileira de Distribuicao	131,238,000		3,016,784
Votorantim Celulose e Papel SA	42,161,000		2,851,025
Embratel Participacoes SA	848,031,000		2,352,650
Braskem SA Class A¹	84,486,000		2,235,072
Telemig Celular Participacoes SA	914,003,000		1,864,091
Companhia Paranaense de Energia Class B¹	462,859,000		1,732,245
Duratex SA	59,917,000		1,645,789
Tele Nordeste Celular Participacoes SA	914,890,000		1,130,850
Tele Celular Sul Participacoes SA	886,351,000		1,083,405
Companhia de Tecidos Norte de Minas	13,948,400		991,354

TOTAL PREFERRED STOCKS (Cost: $163,895,924)			187,297,985

SHORT-TERM INVESTMENTS – 0.34%

MONEY MARKET FUNDS – 0.34%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	917,428		917,428

			917,428

TOTAL SHORT-TERM INVESTMENTS (Cost: $917,428)			917,428

TOTAL INVESTMENTS IN SECURITIES – 99.23% (Cost $228,666,519)			263,074,255
Other Assets, Less Liabilities – 0.77%			2,043,320

NET ASSETS – 100.00%		$	265,117,575

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Unaudited)

iSHARES MSCI CANADA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.84%

Royal Bank of Canada	468,490	$	22,154,418
Nortel Networks Corp.¹	2,729,475		21,766,635
Bank of Nova Scotia	354,375		18,131,428
EnCana Corp.	333,900		14,393,722
Bank of Montreal	347,400		14,074,652
Canadian Imperial Bank of Commerce	257,175		13,156,320
Alcan Inc.	257,625		12,129,064
Sun Life Financial Inc.	433,800		11,758,752
Manulife Financial Corp.	325,934		11,628,441
Suncor Energy Inc.	315,675		8,180,376
Canadian National Railway Co.	207,225		8,134,556
Barrick Gold Corp.	359,775		7,301,415
Petro-Canada	156,375		7,030,028
TransCanada Corp.	336,600		6,951,508
Talisman Energy Inc.	91,125		5,300,769
Thomson Corp.	163,575		5,201,971
Magna International Inc. Class A	64,350		5,077,020
Canadian Natural Resources Ltd.	89,780		4,901,349
Placer Dome Inc.	287,775		4,842,899
Inco Ltd.¹	130,275		4,808,063
BCE Inc.	212,175		4,631,717
Enbridge Inc.	113,850		4,402,964
Power Corp. of Canada	112,725		4,343,494
National Bank of Canada	127,125		4,325,140
Imperial Oil Ltd.	94,950		4,320,251
Brascan Corp. Class A	114,075		4,246,727
Loblaw Companies Ltd.	79,200		3,863,933
Great-West Lifeco Inc.	93,379		3,528,463
Power Financial Corp.	87,300		3,513,471
Nexen Inc.	88,431		3,292,065
Potash Corp. of Saskatchewan Inc.	37,575		3,090,293
Bombardier Inc. Class B	633,483		3,064,136
George Weston Ltd.	38,250		2,803,717
Canadian Pacific Railway Ltd.	112,050		2,630,576
ATI Technologies Inc.¹	168,315		2,609,243
Teck Cominco Ltd. Class B	129,600		2,434,075
Shell Canada Ltd.	50,400		2,311,244
Abitibi-Consolidated Inc.	265,050		2,093,930
Shaw Communications Inc. Class B	123,582		2,073,285
Rogers Communications Inc. Class B	108,450		2,039,272
Noranda Inc.	119,025		1,943,609
Brookfield Properties Corp.	64,806		1,936,814
Shoppers Drug Mart Corp.¹	82,125		1,924,360
Cameco Corp.	40,281		1,912,353
Investors Group Inc.	76,950		1,898,301
Precision Drilling Corp. Class A¹	38,256		1,827,620
Canadian Tire Corp. Class A	55,140		1,799,987
TransAlta Corp.	134,325		1,786,995
Husky Energy Inc.	91,127		1,735,267
NOVA Chemicals Corp.	63,000		1,724,136
Goldcorp Inc.	127,350		1,676,170
Cognos Inc.¹	53,100		1,651,077
Penn West Petroleum Ltd.	36,909		1,622,978
Domtar Inc.	140,625		1,619,271
Falconbridge Ltd.	58,275		1,563,555
MDS Inc.	98,550		1,549,771
TELUS Corp.	88,664		1,546,953
Fairmont Hotels & Resorts Inc.	58,068		1,473,177
Dofasco Inc.	56,025		1,467,694
Fairfax Financial Holdings Ltd.	9,450		1,457,909
Celestica Inc.¹	83,158		1,425,477
Agrium Inc.	90,900		1,353,592
Glamis Gold Ltd.¹	87,075		1,344,008
SNC-Lavalin Group Inc.	32,850		1,191,096
CGI Group Inc.¹	181,359		1,175,944
Finning International Inc.	49,950		1,139,534
QLT Corp.¹	47,744		1,127,993
Biovail Corp.¹	54,000		1,101,532
CP Ships Ltd.	60,975		1,099,300
Onex Corp.	90,482		1,062,114
Masonite International Corp.¹	37,350		1,000,732
C.I. Fund Management Inc.	88,760		995,594
MI Developments Inc. Class A¹	32,830		948,626
Four Seasons Hotels Inc.	17,106		917,292
Meridian Gold Inc.¹	70,425		887,562
Aliant Inc.	34,200		803,926
Kinross Gold Corp.¹	120,700		801,518
Agnico-Eagle Mines Ltd.	53,550		727,969
Molson Inc. Class A	29,967		681,195
CAE Inc.	117,450		560,224


32		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI CANADA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Hudson’s Bay Co.	52,875	$	513,874
Intrawest Corp.	28,800		503,343
Ballard Power Systems Inc.¹	13,500		140,660
Angiotech Pharmaceuticals Inc.¹	4,950		126,724

TOTAL COMMON STOCKS (Cost: $258,589,932)			328,289,208

SHORT-TERM INVESTMENTS – 0.13%

MONEY MARKET FUNDS - 0.13%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	431,348		431,348

			431,348

TOTAL SHORT - TERM INVESTMENTS (Cost: $431,348)			431,348

TOTAL INVESTMENTS IN SECURITIES – 99.97% (Cost $259,021,280)			328,720,556

Other Assets, Less Liabilities – 0.03%			89,447

NET ASSETS – 100.00%		$	328,810,003

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Unaudited)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 97.05%
ARGENTINA – 0.99%

BBVA Banco Frances SA ADR	699,504	$	6,148,640
Petrobras Energia Participaciones SA ADR	338,832		4,523,407
Tenaris SA ADR	204,464		7,084,678

			17,756,725
BERMUDA – 0.16%
Brilliance China Automotive Holdings Ltd.	6,240,000		2,966,142

			2,966,142
BRAZIL – 6.96%
Aracruz Celulose SA ADR	96,512		3,488,909
Banco Bradesco SA ADR	365,456		9,257,000
Banco Itau Holding Financiera SA ADR	293,280		13,930,800
Brasil Telecom Participacoes SA ADR	165,568		6,311,452
Companhia Brasileira de Distribuicao Pao de Acucar ADR	201,552		4,635,696
Companhia de Bebidas das Americas ADR	608,400		16,365,960
Companhia Vale do Rio Doce ADR	260,000		15,054,000
Companhia Vale do Rio Doce Sponsored ADR	365,248		18,171,088
Empresa Brasiliera de Aeronautica SA ADR	199,680		6,028,339
Petroleo Brasileiro SA ADR	546,000		17,035,200
Tele Norte Leste Participacoes SA ADR	688,064		10,011,331
Telesp Celular Partcipacoes SA ADR	449,696		3,404,199
Votorantim Celulose e Papel ADR	43,680		1,485,120

			125,179,094
CHILE – 2.19%
Banco Santander Chile SA ADR	410,176		11,300,349
Compania de Telecomunicaciones de Chile SA ADR	713,648		11,190,001
Enersis SA ADR	1,049,152		7,522,420
Sociedad Quimica y Minera de Chile SA ADR	223,600		9,375,548

			39,388,318
CHINA – 4.76%
Beijing Capital International Airport Co. Ltd. Class H	832,000		312,647
Beijing Datang Power Generation Co. Ltd. Class H	1,664,000		1,410,921
China Life Insurance Co. Ltd. Hong Kong	12,128,000		8,647,443
China Petroleum and Chemical Corp. Class H	34,112,000		14,352,384
China Shipping Development Co. Ltd.	3,744,000		2,982,175
China Southern Airlines Co. Ltd.¹	1,248,000		709,469
China Telecom Corp. Ltd. Class H	17,888,000		6,951,727
Guangshen Railway Co. Ltd. Class H	13,312,000		3,976,233
Huadian Power International Corp. Ltd.	7,072,000		2,771,071
Huaneng Power International Inc. Class H	2,496,000		4,729,793
Jiangsu Expressway Co. Ltd. Class H	1,248,000		657,361
Jiangxi Copper Co. Ltd.	3,744,000		2,368,905
PetroChina Co. Ltd. Class H	44,096,000		23,651,638
Qingling Motors Co. Ltd.	2,912,000		542,457
Sinopec Shanghai Petrochemical Co. Ltd.	4,992,000		2,292,747
Travelsky Technology Ltd. Class H	416,000		443,585
Tsingtao Brewery Co. Ltd. Class H	832,000		1,015,436
Yanzhou Coal Mining Co. Ltd. Class H	2,912,000		3,348,266
Yizheng Chemical Fibre Co. Ltd.	1,664,000		386,934
Zhejiang Expressway Co. Ltd.	4,992,000		4,040,366

			85,591,558
CZECH REPUBLIC – 2.41%
CEZ AS	2,075,228		14,186,157
Komercni Banka AS	61,990		6,919,362
Philip Morris CR AS	26,624		18,216,314
Unipetrol AS¹	1,601,600		4,017,311

			43,339,144


34		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
HONG KONG – 4.52%
Beijing Enterprises Holdings Ltd.	832,000	$	1,074,224
China Merchants Holdings International Co. Ltd.	832,000		1,213,179
China Mobile Ltd.	9,776,000		34,600,975
China Overseas Land & Investment Ltd.	2,080,000		494,357
China Pharmaceutical Group Ltd.	2,956,000		1,101,306
China Resources Enterprises Ltd.	2,912,000		4,115,187
China Resources Land Ltd.	6,656,000		1,274,105
China Travel International Investment Hong Kong Ltd.	14,560,000		2,936,747
Citic Pacific Ltd.	2,288,000		7,069,304
CNOOC Ltd.	5,928,000		11,994,836
COFCO International Ltd.	1,248,000		753,560
Cosco Pacific Ltd.	1,248,000		1,899,934
Denway Motors Ltd.	4,576,000		5,290,955
Legend Group Ltd.	7,072,000		2,975,494
Shanghai Industrial Holdings Ltd.	832,000		2,185,859
Shenzhen Investment Ltd.	2,080,000		355,403
TCL International Holdings Ltd.	4,160,000		1,897,262

			81,232,687
HUNGARY – 1.52%
Gedeon Richter Rt	109,616		12,468,443
MATAV Rt	922,272		3,615,884
OTP Bank Rt¹	680,368		11,163,850
Raba Jarmuipari Holding Rt	18,720		74,300

			27,322,477
INDIA – 5.02%
Dr. Reddy’s Laboratories Ltd. ADR	329,056		8,374,475
HDFC Bank Ltd. ADR	494,208		15,028,865
ICICI Bank Ltd. ADR	687,531		10,244,212
Infosys Technologies Ltd. ADR	201,344		16,918,936
Mahanagar Telephone Nigam Ltd. ADR	1,327,872		9,481,006
Satyam Computer Services Ltd. ADR	576,368		11,827,071
Videsh Sanchar Nigam Ltd. ADR	1,322,672		11,679,194
Wipro Ltd. ADR	162,864		6,711,625

			90,265,384
INDONESIA – 2.46%
PT Aneka Tambang Tbk	15,600,000	$	2,767,593
PT Astra International Inc. Tbk¹	5,720,000		3,653,223
PT Bank Central Asia Tbk	5,200,000		2,244,825
PT Bank Mandiri¹	10,920,000		1,808,161
PT Bank Pan Indonesia Tbk	39,104,000		1,618,734
PT Bank Rakyat Indonesia	1,189,136		217,997
PT Bhakti Investama Tbk¹	22,360,000		1,057,836
PT Bimantara Citra Tbk	1,872,000		791,532
PT Gudang Garam Tbk	2,080,000		3,468,717
PT Hanjaya Mandala Sampoerna Tbk	5,616,000		3,238,084
PT Kalbe Farma Tbk	63,024,000		3,577,944
PT Matahari Putra Prima Tbk	18,200,000		1,452,986
PT Ramayana Lestari Sentosa Tbk	4,160,000		1,795,860
PT Semen Gresik (Persero) Tbk	119,500		125,790
PT Telekomunikasi Indonesia Tbk	19,032,000		16,432,123

			44,251,405
ISRAEL – 3.68%
AudioCodes Ltd.	177,632		2,445,993
Bank Hapoalim Ltd.¹	2,404,688		6,074,663
Bank Leumi Le-Israel¹	3,148,288		5,828,085
Check Point Software Technologies Ltd.	239,850		5,521,347
Elbit Systems Ltd.	46,176		868,179
Israel Chemicals Ltd.	1,830,400		2,793,103
Israel Discount Bank Class A¹	3,172,208		3,426,607
Makhteshim-Agan Industries Ltd.	728,000		2,682,361
NICE Systems Ltd.¹	20,800		480,499
Supersol Ltd.	209,456		473,597
Teva Pharmaceutical Industries Ltd.	500,864		32,568,991
United Mizrahi Bank Ltd.¹	933,712		3,038,880

			66,202,305
MEXICO – 7.49%
Alfa SA de CV Class A	873,600		3,234,006
America Movil SA de CV Series L¹	14,643,200		26,058,530
Cemex SA de CV Series CPO	1,830,400		10,605,716
Consorcio Ara SA de CV¹	1,456,000		4,478,077
Controladora Comercial Mexicana SA de CV	2,017,600		2,640,413


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Fomento Economico Mexicano SA de CV Class UBD	1,268,800	$	5,695,810
Grupo Carso SA de CV Series A1	62,400		266,248
Grupo Continental SA	1,102,400		2,145,119
Grupo Elektra SA de CV Series CPO	291,200		1,615,160
Grupo Financiero Banorte SA de CV Series O	335,400		1,226,168
Grupo Financiero BBVA Bancomer SA de CV Class B¹	7,176,000		7,698,416
Grupo Mexico SA de CV Series B¹	936,000		3,563,136
Grupo Modelo SA de CV Series C	2,724,800		7,291,909
Grupo Televisa SA Series CPO	4,284,800		9,394,844
Hylsamex SA de CV Series CPO¹	296,946		240,198
Industrias Penoles SA de CV Series CP	187,200		824,631
Kimberly-Clark de Mexico SA de CV Class A	1,518,400		4,011,282
Telefonos de Mexico SA de CV Series L	15,412,800		26,146,528
TV Azteca SA de CV Series CPO	1,996,800		1,135,150
Vitro SA de CV Series A	3,036,800		3,686,043
Wal-Mart de Mexico SA de CV Series C	1,560,000		4,781,020
Wal-Mart de Mexico SA de CV Series V	2,579,200		7,930,262

			134,668,666
PERU – 0.38%
Compania de Minas Buenaventura SAu ADR	279,136		6,757,883

			6,757,883
PHILIPPINE ISLANDS – 1.41%
ABS-CBN Broadcasting Corp.¹	5,907,396		2,438,689
Ayala Corp.	18,720,400		1,961,121
Bank of the Philippine Islands	3,411,252		2,755,894
Equitable PCI Bank Inc.¹	2,443,624		1,670,446
Filinvest Land Inc.¹	24,960,000		460,909
Globe Telecom Inc.	118,560		1,863,026
Jollibee Foods Corp.	8,944,000		3,017,329
Manila Electric Co. Class B¹	2,288,000		1,300,000
Megaworld Corp.¹	35,381,068		640,779
Metropolitan Bank & Trust Co.¹	40		18
Petron Corp.	41,603,600		2,326,906
Philippine Long Distance Telephone Co.¹	257,920		4,442,159
SM Prime Holdings Inc.	23,088,000		2,500,653

			25,377,929
RUSSIA – 5.16%
JSC MMC Norilsk Nickel ADR	160,368		11,386,128
LUKOIL ADR	332,384		36,595,478
Rostelecom ADR	197,392		2,828,627
Surgutneftegaz ADR	791,024		25,470,973
Tatneft ADR	56,160		1,480,939
YUKOS ADR	305,761		14,988,404

			92,750,549
SOUTH AFRICA – 14.36%
African Bank Investments Ltd.	1,775,280		2,895,856
Alexander Forbes Ltd.	1,828,528		3,560,015
Anglo American Platinum Corp. Ltd.	112,736		4,999,943
Anglo American PLC	2,826,304		70,688,406
AngloGold Ltd.	228,176		9,673,853
Anglovaal Industries Ltd.	843,028		2,173,635
Barloworld Ltd.	437,424		4,448,881
Bidvest Group Ltd.	516,703		4,117,155
Bidvest Group Ltd. Warrants (Expire 12/8/06)¹	18,430		15,877
Dimension Data Holdings PLC¹	2,623,920		1,972,427
FirstRand Ltd.	5,948,800		8,138,627
Foschini Ltd.	1,937,312		5,606,744
Gold Fields Ltd.	667,888		8,233,754
Harmony Gold Mining Co. Ltd.	249,808		3,804,488
Impala Platinum Holdings Ltd.	97,968		8,130,247
Imperial Holdings Ltd.	541,008		5,693,537
Investec Ltd.	181,584		3,712,760
Iscor Ltd.	743,600		3,845,725
JD Group Ltd.	588,848		3,673,937
Liberty Group Ltd.	360,048		2,977,169
Metro Cash & Carry Ltd.¹	6,204,030		2,135,944
MTN Group Ltd.¹	2,160,496		9,663,197
Nampak Ltd.	1,595,568		3,190,416
Naspers Ltd.	810,992		5,059,937
Nedcor Ltd.	8,808		84,750
Network Healthcare Holdings Ltd.¹	3,581,982		2,417,966


36		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
New Africa Capital Ltd.	1,834,144	$	2,123,267
Old Mutual PLC	7,279,584		12,870,467
Pick’n Pay Stores Ltd.	880,672		2,330,275
Sanlam Ltd.	5,643,456		7,763,305
Sappi Ltd.	402,480		5,506,984
Sasol Ltd.	1,192,048		17,885,648
Shoprite Holdings Ltd.	2,412,800		3,391,668
Standard Bank Group Ltd.	1,996,176		12,094,399
Telkom South Africa Ltd.	250,848		2,536,199
Tiger Brands Ltd.	333,008		4,140,384
Tongaat-Hulett Group Ltd.	170,976		1,086,031
Truworths International Ltd.	1,712,256		2,445,528
Woolworths Holdings Ltd.	3,027,856		3,113,664

			258,203,065
SOUTH KOREA – 17.37%
Kookmin Bank ADR	948,688		39,399,013
Korea Electric Power Corp. ADR	3,133,312		32,367,113
KT Corp. ADR	1,103,232		20,983,473
POSCO ADR	1,438,944		53,658,222
Samsung Electronics Co. Ltd. GDR	589,888		137,738,848
SK Telecom Co. Ltd. ADR	1,125,072		28,138,051

			312,284,720
TAIWAN – 11.26%
AU Optronics Corp. ADR	2,221,024		38,201,613
Chunghwa Telecom Co. Ltd. ADR	1,680,640		27,629,722
Siliconware Precision Industries Co. ADR	6,758,960		36,903,922
Taiwan Semiconductor Manufacturing Co. Ltd. ADR	5,292,157		54,985,511
United Microelectronics Corp. ADR	8,603,728		44,825,423

			202,546,191
THAILAND – 3.87%
Advanced Info Service PCL	1,601,600		3,526,047
Bangkok Bank PCL¹	1,497,600		3,792,599
Bangkok Expressway PCL	3,868,800		2,486,312
Banpu PCL	624,000		2,271,112
BEC World PCL	264,000		131,026
Charoen Pokphand Food PCL	5,824,000		601,818
Electricity Generating PCL	1,518,400		3,072,354
Industrial Finance Corp. of Thailand¹	10,025,600		1,339,639
Kasikornbank PCL¹	2,974,400		3,860,891
Kiatnakin Finance PCL	644,800		742,611
Krung Thai Bank PCL	1,607,400		458,205
Land & House PCL	5,241,600		1,720,963
National Finance PCL	2,600,000		1,019,089
National Petrochemical PCL	832,000		2,604,632
PTT Exploration and Production PCL	665,600		4,269,056
PTT PCL	3,892,400		15,950,023
Ratchaburi Electricity Generating Holding PCL	6,843,200		6,966,862
Sahavira Steel Industry PCL	1,815,600		1,571,148
Shin Corp. PCL	2,454,400		2,280,112
Siam Cement PCL	624,000		4,192,822
Siam City Cement PCL	124,800		813,153
Siam Makro PCL	2,808,000		3,055,281
Thai Union Frozen Products PCL	2,496,000		1,715,246
TISCO Finance PCL¹	520,000		403,665
United Broadcasting Corp. PCL¹	1,102,400		676,198

			69,520,864
TURKEY – 0.89%
Adana Cimento TAS Class A	291,537,000		1,086,678
Akbank TAS	499,019,998		2,611,586
Akcansa Cimento AS	110,934,500		315,345
Arcelik AS	203,009,250		1,161,799
Dogan Yayin Holding AS¹	231,716,400		876,789
Eregli Demir ve Celik Fabrikalari TAS¹	41,600,000		1,300,000
Hurriyet Gazetecilik ve Matbaacilik AS¹	259,073,440		907,148
Trakya Cam Sanayii AS	260,714,921		706,756
Tupras-Turkiye Petrol Rafinerileri AS	184,510,000		1,528,320
Turk Sise ve Cam Fabrikalari AS¹	746,512,000		1,995,569
Turkiye Garanti Bankasi AS¹	486,946,323		1,750,879
Vestel Elektronik Sanayi ve Ticaret AS¹	394,992,000		1,680,501
Yapi Ve Kredi Bankasi AS	70,512,000		157,962

			16,079,332


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
VENEZUELA – 0.19%
Compania Anonima Nacional Telefonos de Venezuela (CANTV) ADR	184,080	$	3,411,002

			3,411,002

TOTAL COMMON STOCKS (Cost: $1,521,759,211)			1,745,095,440

PREFERRED STOCKS – 1.29%

BRAZIL – 1.19%
Petroleo Brasileiro SA ADR	762,736		21,432,882

			21,432,882

THAILAND – 0.10%
Siam Commercial Bank PCL¹	1,393,600		1,684,805

			1,684,805

TOTAL PREFERRED STOCKS (Cost: $20,154,066)			23,117,687

EXCHANGE TRADED FUNDS – 1.34%
iShares MSCI Malaysia Index Fund³	728,000		5,241,600
iShares MSCI South Korea Index Fund³	270,400		7,468,448
iShares MSCI Taiwan Index Fund³	894,816		11,310,474

TOTAL EXCHANGE TRADED FUNDS (Cost: $20,084,364)			24,020,522

SHORT-TERM INVESTMENTS – 18.51%

MONEY MARKET FUNDS – 8.91%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	109,206,109		109,206,109
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	39,800,778		39,800,778
BlackRock Temp Cash Money Market Fund²	1,845,140		1,845,140
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²	9,306,359		9,306,359

			160,158,386


*Security*	Shares or Principal		*Value*
FLOATING RATE NOTES – 5.11%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	1,809,126	$	1,809,067
1.05%, 09/15/04^2,4		3,618,253		3,618,057
1.05%, 10/12/04^2,4		1,809,126		1,809,016
1.14%, 08/23/04^2,4		1,809,126		1,809,872
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		2,713,689		2,713,444
1.38%, 11/22/04²		904,563		904,613
1.40%, 10/29/04²		3,618,253		3,618,193
CC USA Inc.
1.05%, 04/19/04^2,4		1,592,031		1,592,021
1.06%, 05/24/04^2,4		3,618,253		3,618,170
1.09%, 07/15/04^2,4		1,809,126		1,809,369
1.51%, 02/15/05^2,4		2,351,864		2,355,462
Dorada Finance Inc.
1.05%, 05/20/04^2,4		3,618,253		3,618,134
1.24%, 08/09/04²		904,563		904,503
1.48%, 01/18/05^2,4		2,713,689		2,713,571
Five Finance Inc.
1.06%, 04/15/04^2,4		1,809,126		1,809,126
HBOS Treasury Services PLC
1.16%, 01/24/05²		3,618,253		3,618,253
Holmes Financing PLC
1.05%, 04/15/04²		361,825		361,825
K2 USA LLC
1.05%, 08/16/04^2,4		904,563		904,501
1.05%, 09/27/04^2,4		3,907,713		3,907,377
1.06%, 05/17/04²		1,809,126		1,809,107
1.07%, 04/13/04²		1,809,126		1,809,116
1.46%, 01/12/05^2,4		1,809,126		1,808,970
Links Finance LLC
1.05%, 06/28/04²		1,809,126		1,809,009
1.06%, 07/20/04²		1,447,301		1,447,190
1.07%, 03/29/04²		1,809,126		1,809,126
1.07%, 05/04/04²		1,809,126		1,809,111
Nationwide Building Society
1.09%, 07/23/04^2,4		2,713,689		2,713,689
1.17%, 12/28/04^2,4		3,618,253		3,618,253
Northern Rock PLC
1.11%, 01/13/05^2,4		3,437,340		3,437,340


38		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Permanent Financing PLC
1.06%, 12/10/04²	$	1,809,126	$	1,809,126
Sigma Finance Inc.
1.06%, 07/01/04²		1,809,126		1,808,976
1.06%, 07/20/04²		1,809,126		1,808,987
1.09%, 10/07/04²		3,618,253		3,617,818
1.24%, 08/06/04²		904,563		904,524
Tango Finance Corp.
1.05%, 01/18/05^2,4		1,592,031		1,591,889
1.06%, 07/15/04^2,4		1,085,476		1,085,342
1.07%, 02/25/05^2,4		2,026,221		2,025,822
1.10%, 07/06/04^2,4		1,085,476		1,085,437
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		1,809,126		1,808,931
1.32%, 02/04/05^2,4		904,563		904,395
White Pine Finance LLC
1.04%, 08/26/04^2,4		1,809,126		1,808,991
1.06%, 04/20/04^2,4		1,809,126		1,809,126
1.06%, 07/06/04^2,4		2,170,952		2,170,879
1.06%, 11/15/04^2,4		2,170,952		2,170,952

				91,976,680
COMMERCIAL PAPER – 2.13%
Amsterdam Funding Corp.
1.03%, 03/03/04²		2,713,689		2,713,535
Corporate Asset Funding Corp.
1.03%, 03/16/04²		1,809,126		1,808,350
1.05%, 05/21/04²		1,881,491		1,877,067
CRC Funding LLC
1.03%, 03/26/04²		1,447,301		1,446,266
Delaware Funding Corp.
1.02%, 03/16/04²		3,658,270		3,656,716
1.03%, 03/05/04²		1,617,033		1,616,848
Edison Asset Securitization
1.03%, 03/03/04²		2,713,689		2,713,534
Eureka Securitization Inc.
1.04%, 04/14/04²		2,170,952		2,168,192
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		1,266,388		1,266,062
Galaxy Funding Inc.
1.05%, 05/17/04²		1,809,126		1,805,083
Gemini Securitization Corp.
1.04%, 04/19/04²		904,563		903,283
GIRO Funding US Corp.
1.05%, 05/19/04²		904,563		902,479
Jupiter Securitization Corp.
1.03%, 03/24/04²		1,809,126		1,807,936
Liberty Street Funding Corp.
1.03%, 03/10/04²		723,651		723,464
New Center Asset Trust
1.04%, 03/01/04²		904,563		904,563
Park Avenue Receivables Corp.
1.03%, 03/22/04²		1,486,559		1,485,666
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		3,618,253		3,616,789
1.04%, 05/20/04²		904,563		902,473
Receivables Capital Corp.
1.03%, 03/15/04²		3,943,895		3,942,315
Windmill Funding Corp.
1.03%, 03/05/04²		2,066,022		2,065,786

				38,326,407
TIME DEPOSITS – 1.67%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		3,618,253		3,618,253
1.33%, 02/10/05²		1,809,126		1,808,869
1.39%, 02/02/05²		1,809,126		1,808,875
1.40%, 10/25/04²		3,618,253		3,617,899
Bank of New York
1.39%, 11/01/04²		3,618,253		3,618,010
Bank of Novia Scotia
1.24%, 10/07/04²		2,713,689		2,713,526
1.42%, 10/29/04²		2,713,689		2,713,824
SunTrust Bank
1.01%, 03/01/04²		5,970,117		5,970,117
Toronto-Dominion Bank
1.34%, 02/10/05²		1,447,301		1,447,095
1.41%, 11/01/04²		2,713,689		2,713,507

				30,029,975


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMERGING MARKETS INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
U.S. GOVERNMENT AGENCY NOTES – 0.49%
Federal Home Loan
Mortgage Corp.
1.15%, 05/12/04²	$	2,713,689	$	2,707,448
1.28%, 08/19/04²		1,447,301		1,438,502
Federal National Mortgage Association
1.28%, 08/20/04²		4,703,728		4,674,963

				8,820,913

REPURCHASE AGREEMENTS – 0.20%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		3,618,253		3,618,253

				3,618,253

TOTAL SHORT-TERM INVESTMENTS (Cost: $332,930,614)				332,930,614

TOTAL INVESTMENTS IN SECURITIES – 118.19% (Cost $1,894,928,255)				2,125,164,263
Other Assets, Less Liabilities – (18.19%)				(327,029,944	)

NET ASSETS – 100.00%			$	1,798,134,319

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


40		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI HONG KONG INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 100.02%
Hutchison Whampoa Ltd.	9,100,800	$	76,581,949
Cheung Kong (Holdings) Ltd.	5,850,000		55,803,041
Sun Hung Kai Properties Ltd.	5,200,000		51,105,815
Hang Seng Bank Ltd.	3,250,000		46,137,194
CLP Holdings Ltd.	6,825,200		35,161,330
BOC Hong Kong (Holdings) Ltd.	13,000,000		26,554,982
Hong Kong & China Gas Co. Ltd.	14,950,663		25,833,799
Swire Pacific Ltd. Class A	3,575,000		25,030,994
Hongkong Electric Holdings Ltd.	5,200,000		22,312,866
Bank of East Asia Ltd.	5,720,100		18,592,153
Wharf (Holdings) Ltd. (The)	5,200,000		16,233,612
Henderson Land Development Co. Ltd.	2,600,000		13,227,387
Li & Fung Ltd.	6,500,000		12,692,948
Hong Kong Exchanges & Clearing Ltd.	3,900,000		10,321,370
PCCW Ltd.¹	13,000,576		10,271,722
Esprit Holdings Ltd.	2,600,000		10,154,358
MTR Corp. Ltd.	6,175,083		9,797,501
Cathay Pacific Airways Ltd.	4,550,000		9,265,017
Hang Lung Properties Ltd.	5,200,000		7,515,561
Johnson Electric Holdings Ltd.	5,525,000		6,636,658
Television Broadcasts Ltd.	1,300,000		6,346,474
New World Development Co. Ltd.	5,850,000		6,313,071
Hysan Development Co. Ltd.	3,250,000		6,116,832
Yue Yuen Industrial (Holdings) Ltd.	1,950,000		5,636,671
Hopewell Holdings Ltd.	2,600,000		5,060,478
Cheung Kong Infrastructure Holdings Ltd.	1,950,000		4,972,796
Sino Land Co. Ltd.	6,500,000		4,425,830
Techtronic Industries Co. Ltd.	1,300,000		4,308,922
Giordano International Ltd.	6,500,000		3,945,670
Shangri-La Asia Ltd.	3,900,000		3,657,573
ASM Pacific Technology Ltd.	650,000		2,964,471
Texwinca Holdings Ltd.	2,600,000		1,887,241
SCMP Group Ltd.	3,900,000		1,741,105
SmarTone Telecommunications Holdings Ltd.	975,000		1,121,071

TOTAL COMMON STOCKS (Cost: $457,668,556)			547,728,462


*Security*	Shares or Principal		*Value*
SHORT-TERM INVESTMENTS – 12.27%

MONEY MARKET FUNDS – 5.89%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		21,946,422	$	21,946,422
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		8,053,266		8,053,266
BlackRock Temp Cash Money Market Fund²		373,345		373,345
Short-Term Investment Co. -
Prime Money Market Portfolio, Institutional Shares²		1,883,043		1,883,043

				32,256,076

FLOATING RATE NOTES – 3.40%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	366,058		366,046
1.05%, 09/15/04^2,4		732,115		732,075
1.05%, 10/12/04^2,4		366,058		366,035
1.14%, 08/23/04^2,4		366,058		366,208
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		549,086		549,037
1.38%, 11/22/04²		183,029		183,039
1.40%, 10/29/04²		732,115		732,103
CC USA Inc.
1.05%, 04/19/04^2,4		322,131		322,128
1.06%, 05/24/04^2,4		732,115		732,098
1.09%, 07/15/04^2,4		366,058		366,107
1.51%, 02/15/05^2,4		475,875		476,603
Dorada Finance Inc.
1.05%, 05/20/04^2,4		732,115		732,091
1.24%, 08/09/04²		183,029		183,017
1.48%, 01/18/05^2,4		549,086		549,062
Five Finance Inc.
1.06%, 04/15/04^2,4		366,058		366,058
HBOS Treasury Services PLC
1.16%, 01/24/05²		732,115		732,115
Holmes Financing PLC
1.05%, 04/15/04²		73,212		73,212


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI HONG KONG INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
K2 USA LLC
1.05%, 08/16/04^2,4	$	183,029	$	183,016
1.05%, 09/27/04^2,4		790,684		790,617
1.06%, 05/17/04²		366,058		366,054
1.07%, 04/13/04²		366,058		366,055
1.46%, 01/12/05^2,4		366,058		366,026
Links Finance LLC
1.05%, 06/28/04²		366,058		366,034
1.06%, 07/20/04²		292,846		292,824
1.07%, 03/29/04²		366,058		366,058
1.07%, 05/04/04²		366,058		366,054
Nationwide Building Society
1.09%, 07/23/04^2,4		549,086		549,087
1.17%, 12/28/04^2,4		732,115		732,115
Northern Rock PLC
1.11%, 01/13/05^2,4		695,509		695,509
Permanent Financing PLC
1.06%, 12/10/04²		366,058		366,058
Sigma Finance Inc.
1.06%, 07/01/04²		366,058		366,027
1.06%, 07/20/04²		366,058		366,029
1.09%, 10/07/04²		732,115		732,027
1.24%, 08/06/04²		183,029		183,021
Tango Finance Corp.
1.05%, 01/18/05^2,4		322,131		322,102
1.06%, 07/15/04^2,4		219,635		219,607
1.07%, 02/25/05^2,4		409,984		409,904
1.10%, 07/06/04^2,4		219,635		219,627
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		366,058		366,018
1.32%, 02/04/05^2,4		183,029		182,995
White Pine Finance LLC
1.04%, 08/26/04^2,4		366,058		366,030
1.06%, 04/20/04^2,4		366,058		366,058
1.06%, 07/06/04^2,4		439,269		439,254
1.06%, 11/15/04^2,4		439,269		439,269

				18,610,509

COMMERCIAL PAPER – 1.42%
Amsterdam Funding Corp.
1.03%, 03/03/04²		549,086		549,055
Corporate Asset Funding Corp.
1.03%, 03/16/04²		366,058		365,900
1.05%, 05/21/04²		380,700		379,805
CRC Funding LLC
1.03%, 03/26/04²		292,846		292,637
Delaware Funding Corp.
1.02%, 03/16/04²		740,212		739,898
1.03%, 03/05/04²		327,190		327,153
Edison Asset Securitization
1.03%, 03/03/04²		549,086		549,055
Eureka Securitization Inc.
1.04%, 04/14/04²		439,269		438,711
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		256,240		256,174
Galaxy Funding Inc.
1.05%, 05/17/04²		366,058		365,239
Gemini Securitization Corp.
1.04%, 04/19/04²		183,029		182,770
GIRO Funding US Corp.
1.05%, 05/19/04²		183,029		182,607
Jupiter Securitization Corp.
1.03%, 03/24/04²		366,058		365,817
Liberty Street Funding Corp.
1.03%, 03/10/04²		146,423		146,386
New Center Asset Trust
1.04%, 03/01/04²		183,029		183,029
Park Avenue Receivables Corp.
1.03%, 03/22/04²		300,789		300,609
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		732,115		731,819
1.04%, 05/20/04²		183,029		182,606
Receivables Capital Corp.
1.03%, 03/15/04²		798,005		797,686
Windmill Funding Corp.
1.03%, 03/05/04²		418,038		417,990

				7,754,946

TIME DEPOSITS – 1.11%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		732,115		732,115
1.33%, 02/10/05²		366,058		366,005
1.39%, 02/02/05²		366,058		366,007
1.40%, 10/25/04²		732,115		732,043


42		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (continued)

iSHARES MSCI HONG KONG INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Bank of New York
1.39%, 11/01/04²	$	732,115	$	732,066
Bank of Novia Scotia
1.24%, 10/07/04²		549,086		549,053
1.42%, 10/29/04²		549,086		549,114
SunTrust Bank
1.01%, 03/01/04²		1,207,990		1,207,990
Toronto-Dominion Bank
1.34%, 02/10/05²		292,846		292,804
1.41%, 11/01/04²		549,086		549,049

				6,076,246

U.S. GOVERNMENT AGENCY NOTES – 0.32%
Federal Home Loan
Mortgage Corp.
1.15%, 05/12/04²		549,086		547,823
1.28%, 08/19/04²		292,846		291,066
Federal National Mortgage Association
1.28%, 08/20/04²		951,750		945,929

				1,784,818

REPURCHASE AGREEMENTS – 0.13%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		732,115		732,115

				732,115

TOTAL SHORT-TERM INVESTMENTS (Cost: $67,214,710)				67,214,710

TOTAL INVESTMENTS IN SECURITIES – 112.29% (Cost $524,883,266)				614,943,172
Other Assets, Less Liabilities – (12.29%)				(67,324,151	)

NET ASSETS – 100.00%			$	547,619,021

(1)	Non-income earning securities.

(2)	All or a portion of this security represents investments of securities lending collateral.

(3)	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

(4)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited)

iSHARES MSCI MALAYSIA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.97%
Malayan Banking Bhd	8,269,800	$	24,809,400
Telekom Malaysia Bhd	5,544,000		14,735,368
Sime Darby Bhd	7,345,800		11,791,942
Tenaga Nasional Bhd	4,481,400		11,439,363
Commerce Asset Holdings Bhd	8,223,600		11,361,553
IOI Corp. Bhd	4,296,600		10,628,432
Genting Bhd	2,032,800		10,164,000
Public Bank Bhd	10,950,637		9,970,843
Maxis Communications Bhd	4,204,200		9,570,087
Malaysian International Shipping Corp. Bhd	2,679,600		9,167,053
Resorts World Bhd	2,818,200		8,380,437
British American Tobacco (Malaysia) Bhd	646,800		7,616,921
AMMB Holdings Bhd	5,174,400		5,555,672
PLUS Expressways Bhd	8,639,400		5,524,669
Gamuda Bhd	2,818,200		4,746,442
Petronas Gas Bhd	2,263,800		4,319,092
Malakoff Bhd	2,772,000		4,303,895
Magnum Corp. Bhd	4,897,200		4,201,282
Hong Leong Bank Bhd	2,725,800		4,160,432
Astro All Asia Networks PLC¹	3,281,100		4,110,009
OYL Industries Bhd	369,733		3,794,628
Tanjong PLC	1,108,800		3,618,189
YTL Corp. Bhd	2,957,420		3,580,035
Berjaya Sports Toto Bhd	2,449,200		2,939,040
Perusahaan Otomobil Nasional Bhd	1,108,800		2,815,768
Kuala Lumpur Kepong Bhd	1,432,200		2,732,487
SP Setia Bhd	2,402,900		2,681,131
Nestle (Malaysia) Bhd	415,800		2,352,553
PPB Group Bhd	1,109,133		2,305,829
Hong Leong Credit Bhd	1,478,800		2,159,826
Road Builder (Malaysia) Holdings Bhd	2,079,500		2,101,389
IJM Corp. Bhd	1,617,000		1,991,463
Malaysian Pacific Industries Bhd	415,800		1,991,463
Malaysian Airline System Bhd¹	1,432,200		1,941,008
Star Publications (Malaysia) Bhd	1,016,400		1,858,942
RHB Capital Bhd	2,633,400		1,781,010
DRB-Hicom Bhd	2,818,200		1,750,251
Malayan Cement Bhd	6,514,200		1,697,121
UMW Holdings Bhd	1,071,433		1,691,736
Golden Hope Plantations Bhd	1,524,600		1,500,527
IGB Corp. Bhd	3,372,600		1,366,791
Petronas Dagangan Bhd	693,000		1,340,408
Unisem (Malaysia) Bhd	462,000		1,325,211
Oriental Holdings Bhd	1,016,800		1,220,160
Multi-Purpose Holdings Bhd¹	3,003,000		1,169,589
Malaysian Oxygen Bhd	369,600		1,137,979
Guinness Anchor Bhd	877,800		1,104,180
Malaysia Mining Corp. Bhd	1,617,000		1,021,263
Edaran Otomobil Nasional Bhd	415,800		1,001,203
TA Enterprise Bhd	3,788,400		996,947
Mulpha International Bhd¹	5,174,400		912,328
New Straits Times Press Bhd¹	693,000		893,605
Hong Leong Industries Bhd	508,200		862,603
OSK Holdings Bhd	1,478,400		820,901
Malaysian Resources Corp. Bhd¹	2,823,700		809,956
IOI Properties Bhd	369,750		783,286
Highlands & Lowlands Bhd	877,800		776,160
Puncak Niaga Holdings Bhd¹	785,400		764,732
Malaysia Airports Holdings Bhd	1,617,000		714,884
Tan Chong Motor Holdings Bhd	1,940,400		679,140
Courts Mammoth Bhd	739,200		626,375
Jaya Tiasa Holdings Bhd	554,400		557,318
TIME Engineering Bhd¹	1,570,800		442,304
WTK Holdings Bhd	323,400		418,718
Hume Industries Bhd	667		904

TOTAL COMMON STOCKS (Cost: $185,047,805)			245,588,233

SHORT-TERM INVESTMENTS – 0.09%

MONEY MARKET FUNDS – 0.09%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	218,790		218,790

			218,790

TOTAL SHORT-TERM INVESTMENTS (Cost: $218,790)			218,790

TOTAL INVESTMENTS IN SECURITIES – 100.06% (Cost $185,266,595)			245,807,023
Other Assets, Less Liabilities – (0.06%)			(154,887	)

NET ASSETS - 100.00%		$	245,652,136

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


44		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI MEXICO INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.94%
America Movil SA de CV Series L¹	12,296,100	$	21,881,713
Telefonos de Mexico SA de CV Series L	10,633,500		18,038,845
Cemex SA de CV Series CPO	1,458,600		8,451,430
Grupo Televisa SA Series CPO	2,187,186		4,795,620
Grupo Financiero BBVA Bancomer SA de CV Class B¹	4,442,100		4,765,487
Wal-Mart de Mexico SA de CV Series V	1,513,272		4,652,855
Fomento Economico Mexicano SA de CV Class UBD	1,020,000		4,578,915
Grupo Modelo SA de CV Series C	1,229,100		3,289,227
Grupo Carso SA de CV Series A1	673,200		2,872,409
Kimberly-Clark de Mexico SA de CV Class A	989,400		2,613,779
America Telecom SA de CV Series A1¹	991,288		1,773,917
TV Azteca SA de CV Series CPO	3,116,100		1,771,455
Grupo Mexico SA de CV Series B¹	454,883		1,731,635
Alfa SA de CV Class A	459,000		1,699,186
Carso Global Telecom SA de CV Class A1¹	1,147,500		1,683,214
Consorcio Ara SA de CV¹	492,146		1,513,645
Controladora Comercial Mexicana SA de CV	1,086,300		1,421,630
Grupo Elektra SA de CV Series CPO	255,020		1,414,486
Corporacion Interamericana de Entretenimiento SA de CV Class B¹	622,200		1,348,489
Coca-Cola Femsa SA de CV ADR¹	56,253		1,337,696
Grupo Financiero Banorte SA de CV Series O	346,800		1,267,844
Industrias Penoles SA de CV Series CP	260,100		1,145,761
Apasco SA de CV	107,100		1,088,859
Grupo Aeroportuario del Sureste SA de CV ADR	47,634		1,045,566
Organizacion Soriana SA de CV Series B¹	346,800		1,018,350
Grupo Continental SA	408,000		793,912
Grupo Bimbo SA Series A	341,700		753,225
Grupo Sanborns SA de CV Series B1¹	346,800		564,496
Vitro SA de CV Series A	382,500		464,275
Hylsamex SA de CV Series CPO¹	131,545		106,406

TOTAL COMMON STOCKS (Cost: $96,098,687)			99,884,327

SHORT-TERM INVESTMENTS - 0.10%

MONEY MARKET FUNDS – 0.10%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	95,737		95,737

			95,737

TOTAL SHORT-TERM INVESTMENTS (Cost: $95,737)			95,737

TOTAL INVESTMENTS IN SECURITIES – 100.04% (Cost $96,194,424)			99,980,064

Other Assets, Less Liabilities – (0.04%)			(35,219	)

NET ASSETS – 100.00%		$	99,944,845

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Unaudited)

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 95.95%
AUSTRALIA – 60.27%
Alumina Ltd.	1,207,268	$	5,123,073
Amcor Ltd.	930,262		5,533,803
AMP Ltd.	1,974,067		7,463,148
Ansell Ltd.	195,570		1,059,262
Aristocrat Leisure Ltd.	311,320		578,879
Australia and New Zealand Banking Group Ltd.	1,950,157		27,068,539
Australian Gas Light Co. Ltd.	478,160		4,205,738
Australian Stock Exchange Ltd.	116,616		1,513,381
BHP Billiton Ltd.	4,057,308		38,378,900
BHP Steel Ltd.	816,755		3,724,289
Boral Ltd.	631,240		2,990,384
Brambles Industries Ltd.	1,033,902		4,235,825
Centro Properties Group	671,488		2,175,964
Coca-Cola Amatil Ltd.	498,542		2,534,844
Coles Myer Ltd.	1,197,034		7,203,858
Commonwealth Bank of Australia	1,366,282		33,395,627
Commonwealth Property Office Fund	1,538,196		1,388,550
Computershare Ltd.	458,638		1,199,593
CSL Ltd.	201,154		3,104,007
CSR Ltd.	1,058,402		1,486,230
Deutsche Office Trust	1,359,144		1,163,999
Foster’s Group Ltd.	2,211,834		7,457,582
Futuris Corp. Ltd.	607,762		797,162
Gandel Retail Trust	1,396,987		1,498,205
General Property Trust	2,122,996		4,881,233
Harvey Norman Holdings Ltd.	615,158		1,328,950
Iluka Resources Ltd.	280,360		895,531
Insurance Australia Group Ltd.	1,808,150		6,277,852
Investa Property Group	1,397,695		2,102,864
James Hardie Industries NV	503,186		2,601,162
John Fairfax Holdings Ltd.	895,604		2,342,501
Leighton Holdings Ltd.	152,994		1,292,566
Lend Lease Corp. Ltd.	413,832		3,160,992
Macquarie Bank Ltd.	231,856		5,921,209
Macquarie Goodman Industrial Trust	1,549,806		2,008,865
Macquarie Infrastructure Group	2,109,752		4,818,226
Mayne Group Ltd.	846,756		2,090,607
Mirvac Group	763,336		2,715,068
National Australia Bank Ltd.	1,627,722		38,806,349
Newcrest Mining Ltd.	350,450		3,109,481
News Corp. Ltd. (The)	1,480,490		13,901,451
OneSteel Ltd.	581,446		937,605
Orica Ltd.	300,140		3,198,023
Origin Energy Ltd.	714,144		3,091,098
PaperlinX Ltd.	447,888		1,555,056
Patrick Corporation Ltd.	496,825		1,912,793
Publishing & Broadcasting Ltd.	134,762		1,286,178
QBE Insurance Group Ltd.	715,606		6,095,469
Rinker Group Ltd.	1,039,310		5,637,214
Rio Tinto Ltd.	337,464		9,404,577
Santos Ltd.	630,122		2,951,056
Sonic Healthcare Ltd.	256,022		1,580,270
Southcorp Ltd.	688,517		1,583,051
Stockland Trust Group	1,276,503		5,278,988
Suncorp-Metway Ltd.	590,906		6,191,306
TAB Ltd.	493,124		1,731,138
TABCORP Holdings Ltd.	451,758		3,945,630
Telstra Corp. Ltd.	2,340,576		8,632,065
Toll Holdings Ltd.	250,862		1,879,396
Transurban Group	506,368		1,758,097
Wesfarmers Ltd.	406,694		8,629,081
Westfield Holdings Ltd.	469,560		4,673,528
Westfield Trust	2,373,170		6,481,808
Westpac Banking Corp. Ltd.	1,936,290		25,172,966
WMC Resources Ltd.¹	1,222,748		4,934,041
Woodside Petroleum Ltd.	501,380		5,887,701
Woolworths Ltd.	1,116,538		10,104,983

			398,068,867
HONG KONG – 22.27%
ASM Pacific Technology Ltd.	172,000		784,445
Bank of East Asia Ltd.	1,530,800		4,975,589
BOC Hong Kong (Holdings) Ltd.	3,913,000		7,993,050
Cathay Pacific Airways Ltd.	1,118,000		2,276,547
Cheung Kong (Holdings) Ltd.	1,634,000		15,586,696
Cheung Kong Infrastructure Holdings Ltd.	516,000		1,315,878
CLP Holdings Ltd.	1,978,000		10,190,047
Esprit Holdings Ltd.	645,000		2,519,062
Giordano International Ltd.	1,548,000		939,676


46		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Hang Lung Properties Ltd.	1,290,500	$	1,865,160
Hang Seng Bank Ltd.	825,600		11,720,267
Henderson Land Development Co. Ltd.	774,000		3,937,691
Hong Kong & China Gas Co. Ltd.	3,956,600		6,836,754
Hong Kong Exchanges & Clearing Ltd.	1,204,000		3,186,392
Hongkong Electric Holdings Ltd.	1,462,000		6,273,348
Hopewell Holdings Ltd.	688,000		1,339,080
Hutchison Whampoa Ltd.	2,322,000		19,539,302
Hysan Development Co. Ltd.	688,000		1,294,886
Johnson Electric Holdings Ltd.	1,677,000		2,014,421
Li & Fung Ltd.	1,720,000		3,358,749
MTR Corp. Ltd.	1,419,000		2,251,411
New World Development Co. Ltd.	1,634,000		1,763,343
PCCW Ltd.¹	3,440,600		2,718,409
SCMP Group Ltd.	1,204,000		537,510
Shangri-La Asia Ltd.	860,000		806,542
Sino Land Co. Ltd.	1,548,000		1,054,029
SmarTone Telecommunications Holdings Ltd.	215,000		247,211
Sun Hung Kai Properties Ltd.	1,376,000		13,523,385
Swire Pacific Ltd. Class A	989,000		6,924,658
Techtronic Industries Co. Ltd.	516,000		1,710,310
Television Broadcasts Ltd.	344,000		1,679,375
Texwinca Holdings Ltd.	688,000		499,393
Wharf (Holdings) Ltd. (The)	1,290,000		4,027,185
Yue Yuen Industrial (Holdings) Ltd.	473,000		1,367,254

			147,057,055
NEW ZEALAND – 2.90%
Auckland International Airport Ltd.	266,869		1,220,201
Carter Holt Harvey Ltd.	900,420		1,178,924
Contact Energy Ltd.	328,606		1,135,307
Fisher & Paykel Appliances Holdings Ltd.	236,672		624,619
Fisher & Paykel Healthcare Corp. Ltd.	92,450		741,481
Fletcher Building Ltd.	448,748		1,261,229
Independent Newspapers Ltd.	156,606		504,561
Lion Nathan Ltd.	299,624		1,391,673
NGC Holdings Ltd.	144,449		234,677
Sky City Entertainment Group Ltd.	465,432		1,371,931
Sky Network Television Ltd.¹	102,168		364,188
Telecom Corp. of New Zealand Ltd.	2,067,182		8,119,715
Tenon Ltd.¹	237,723		216,736
Tower Ltd.¹	474,850		462,224
Warehouse Group Ltd. (The)	114,552		329,021

			19,156,487
SINGAPORE – 10.51%
Allgreen Properties Ltd.	430,000		290,498
Capitaland Ltd.	1,118,000		1,175,632
Chartered Semiconductor Manufacturing Ltd.¹	1,032,000		1,036,698
City Developments Ltd.	453,000		1,782,993
ComfortDelGro Corp. Ltd.	1,806,000		1,002,597
Creative Technology Ltd.	64,500		678,249
Datacraft Asia Ltd.¹	258,000		345,720
DBS Group Holdings Ltd.	1,204,000		10,397,298
Fraser & Neave Ltd.	172,830		1,441,731
Haw Par Corp. Ltd.	86,397		247,682
Jardine Cycle & Carriage Ltd.	86,000		310,707
Keppel Corp. Ltd.	516,000		2,212,836
Keppel Land Ltd.	430,000		485,005
Neptune Orient Lines Ltd.¹	1,118,000		1,379,233
Oversea-Chinese Banking Corp. Ltd.	1,032,000		7,699,457
Overseas Union Enterprise Ltd.	86,000		330,915
Parkway Holdings Ltd.	516,000		312,222
SembCorp Industries Ltd.	1,032,000		866,947
SembCorp Logistics Ltd.	344,000		414,275
SembCorp Marine Ltd.	516,000		292,519
Singapore Airlines Ltd.	602,000		4,102,335
Singapore Exchange Ltd.	860,000		889,176
Singapore Land Ltd.	86,000		208,148
Singapore Post Ltd.	1,376,000		606,256
Singapore Press Holdings Ltd.	430,000		4,698,487
Singapore Technologies Engineering Ltd.	1,462,000		1,786,436
Singapore Telecommunications Ltd.	6,708,000		9,181,754
SMRT Corp. Ltd.	860,000		295,550
ST Assembly Test Services Ltd.¹	344,000		379,921
United Overseas Bank Ltd.	1,290,000		10,685,269
United Overseas Land Ltd.	344,000		414,275
Venture Corp. Ltd.	258,000		3,258,628
Wing Tai Holdings Ltd.	430,000		212,190

			69,421,639

TOTAL COMMON STOCKS (Cost: $532,659,314)			633,704,048


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

February 29, 2004


*Security*	Shares or Principal		*Value*
PREFERRED STOCKS – 3.68%

AUSTRALIA – 3.63%
News Corp. Ltd. (The)		2,901,038	$	23,972,149

				23,972,149
NEW ZEALAND – 0.05%
Tenon Ltd.¹		340,843		313,088

				313,088

TOTAL PREFERRED STOCKS (Cost: $20,907,303)				24,285,237

SHORT-TERM INVESTMENTS – 3.39%

MONEY MARKET FUNDS – 1.64%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		7,454,095		7,454,095
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		2,664,928		2,664,928
BlackRock Temp Cash Money Market Fund²		123,544		123,544
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		623,123		623,123

				10,865,690
FLOATING RATE NOTES – 0.93%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	121,133		121,129
1.05%, 09/15/04^2,4		242,266		242,253
1.05%, 10/12/04^2,4		121,133		121,126
1.14%, 08/23/04^2,4		121,133		121,183
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		181,700		181,683
1.38%, 11/22/04²		60,567		60,570
1.40%, 10/29/04²		242,266		242,262


*Security*	*Principal*		*Value*
CC USA Inc.
1.05%, 04/19/04^2,4	$	106,597	$	106,597
1.06%, 05/24/04^2,4		242,266		242,261
1.09%, 07/15/04^2,4		121,133		121,149
1.51%, 02/15/05^2,4		157,473		157,714
Dorada Finance Inc.
1.05%, 05/20/04^2,4		242,266		242,258
1.24%, 08/09/04²		60,567		60,563
1.48%, 01/18/05^2,4		181,700		181,692
Five Finance Inc.
1.06%, 04/15/04^2,4		121,133		121,133
HBOS Treasury Services PLC
1.16%, 01/24/05²		242,266		242,266
Holmes Financing PLC
1.05%, 04/15/04²		24,227		24,227
K2 USA LLC
1.05%, 08/16/04^2,4		60,567		60,562
1.05%, 09/27/04^2,4		261,647		261,626
1.06%, 05/17/04²		121,133		121,132
1.07%, 04/13/04²		121,133		121,133
1.46%, 01/12/05^2,4		121,133		121,123
Links Finance LLC
1.05%, 06/28/04²		121,133		121,125
1.06%, 07/20/04²		96,906		96,899
1.07%, 03/29/04²		121,133		121,133
1.07%, 05/04/04²		121,133		121,132
Nationwide Building Society
1.09%, 07/23/04^2,4		181,700		181,700
1.17%, 12/28/04^2,4		242,266		242,266
Northern Rock PLC
1.11%, 01/13/05^2,4		230,153		230,153
Permanent Financing PLC
1.06%, 12/10/04²		121,133		121,133
Sigma Finance Inc.
1.06%, 07/01/04²		121,133		121,123
1.06%, 07/20/04²		121,133		121,124
1.09%, 10/07/04²		242,266		242,237
1.24%, 08/06/04²		60,567		60,564


48		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Tango Finance Corp.
1.05%, 01/18/05^2,4	$	106,597	$	106,588
1.06%, 07/15/04^2,4		72,680		72,671
1.07%, 02/25/05^2,4		135,669		135,642
1.10%, 07/06/04^2,4		72,680		72,677
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		121,133		121,120
1.32%, 02/04/05^2,4		60,567		60,555
White Pine Finance LLC
1.04%, 08/26/04^2,4		121,133		121,124
1.06%, 04/20/04^2,4		121,133		121,133
1.06%, 07/06/04^2,4		145,360		145,355
1.06%, 11/15/04^2,4		145,360		145,360

				6,158,456
COMMERCIAL PAPER – 0.39%
Amsterdam Funding Corp.
1.03%, 03/03/04²		181,700		181,689
Corporate Asset Funding Corp.
1.03%, 03/16/04²		121,133		121,081
1.05%, 05/21/04²		125,978		125,683
CRC Funding LLC
1.03%, 03/26/04²		96,906		96,837
Delaware Funding Corp.
1.02%, 03/16/04²		244,946		244,842
1.03%, 03/05/04²		108,271		108,259
Edison Asset Securitization
1.03%, 03/03/04²		181,700		181,689
Eureka Securitization Inc.
1.04%, 04/14/04²		145,360		145,175
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		84,793		84,771
Galaxy Funding Inc.
1.05%, 05/17/04²		121,133		120,862
Gemini Securitization Corp.
1.04%, 04/19/04²		60,567		60,481
GIRO Funding US Corp.
1.05%, 05/19/04²		60,567		60,427
Jupiter Securitization Corp.
1.03%, 03/24/04²		121,133		121,053
Liberty Street Funding Corp.
1.03%, 03/10/04²		48,453		48,441
New Center Asset Trust
1.04%, 03/01/04²		60,567		60,567
Park Avenue Receivables Corp.
1.03%, 03/22/04²		99,535		99,475
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		242,266		242,168
1.04%, 05/20/04²		60,567		60,427
Receivables Capital Corp.
1.03%, 03/15/04²		264,070		263,964
Windmill Funding Corp.
1.03%, 03/05/04²		138,334		138,318

				2,566,209

TIME DEPOSITS – 0.30%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		242,266		242,266
1.33%, 02/10/05²		121,133		121,116
1.39%, 02/02/05²		121,133		121,116
1.40%, 10/25/04²		242,266		242,242
Bank of New York
1.39%, 11/01/04²		242,266		242,250
Bank of Novia Scotia
1.24%, 10/07/04²		181,700		181,689
1.42%, 10/29/04²		181,700		181,709
SunTrust Bank
1.01%, 03/01/04²		399,739		399,739
Toronto-Dominion Bank
1.34%, 02/10/05²		96,906		96,893
1.41%, 11/01/04²		181,700		181,687

				2,010,707
U.S. GOVERNMENT AGENCY NOTES – 0.09%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		181,700		181,282
1.28%, 08/19/04²		96,906		96,317
Federal National Mortgage Association
1.28%, 08/20/04²		314,946		313,020

				590,619


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
PURCHASE AGREEMENTS – 0.04%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²	$	242,266	$	242,266

				242,266

TOTAL SHORT-TERM INVESTMENTS (Cost: $22,433,947)				22,433,947


TOTAL INVESTMENTS IN SECURITIES – 103.02% (Cost $576,000,564)				680,423,232

Other Assets, Less Liabilities – (3.02%)				(19,956,681	)


NET ASSETS – 100.00%			$	660,466,551

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


50		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI SINGAPORE INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.77%

United Overseas Bank Ltd.	3,080,000	$	25,512,116
DBS Group Holdings Ltd.	2,800,000		24,179,762
Singapore Telecommunications Ltd.	15,680,000		21,462,417
Oversea-Chinese Banking Corp. Ltd.	2,240,000		16,711,999
Singapore Airlines Ltd.	1,120,000		7,632,251
Keppel Corp. Ltd.	1,680,000		7,204,582
Venture Corp. Ltd.	560,000		7,072,992
City Developments Ltd.	1,680,000		6,612,425
Singapore Press Holdings Ltd.	560,000		6,118,960
Singapore Technologies Engineering Ltd.	4,760,000		5,816,302
Fraser & Neave Ltd.	560,000		4,671,464
Singapore Exchange Ltd.	3,920,000		4,052,989
Capitaland Ltd.	3,640,000		3,827,640
Neptune Orient Lines Ltd.¹	3,080,000		3,799,677
ComfortDelGro Corp. Ltd.	5,600,000		3,108,827
Chartered Semiconductor Manufacturing Ltd.¹	3,080,000		3,094,023
SembCorp Industries Ltd.	3,080,000		2,587,399
Haw Par Corp. Ltd.	840,000		2,408,107
Singapore Post Ltd.	4,760,000		2,097,224
Jardine Cycle & Carriage Ltd.	560,000		2,023,204
SMRT Corp. Ltd.	5,320,000		1,828,286
Creative Technology Ltd.	168,000		1,766,603
Allgreen Properties Ltd.	2,520,000		1,702,453
United Overseas Land Ltd.	1,400,000		1,686,004
Keppel Land Ltd.	1,400,000		1,579,086
Parkway Holdings Ltd.	2,520,000		1,524,805
SembCorp Marine Ltd.	2,520,000		1,428,580
Singapore Land Ltd.	560,000		1,355,383
SembCorp Logistics Ltd.	1,120,000		1,348,803
ST Assembly Test Services Ltd.¹	1,120,000		1,236,951
Datacraft Asia Ltd.¹	840,000		1,125,600
Overseas Union Enterprise Ltd.	280,000		1,077,398
Wing Tai Holdings Ltd.	1,400,000		690,850

TOTAL COMMON STOCKS (Cost: $152,405,484)			178,345,162


*Security*	Shares or Principal	*Value*
SHORT-TERM INVESTMENTS – 3.81%

MONEY MARKET FUNDS – 1.87%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	2,319,541	$	2,319,541
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	798,456		798,457
BlackRock Temp Cash Money Market Fund²	37,016		37,016
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²	186,698		186,698

			3,341,712
FLOATING RATE NOTES – 1.03%
Beta Finance Inc.
1.05%, 05/20/04^2,4	36,293		36,292
1.05%, 09/15/04^2,4	72,587		72,583
1.05%, 10/12/04^2,4	36,293		36,291
1.14%, 08/23/04^2,4	36,293		36,308
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²	54,440		54,435
1.38%, 11/22/04²	18,147		18,148
1.40%, 10/29/04²	72,587		72,586
CC USA Inc.
1.05%, 04/19/04^2,4	31,938		31,938
1.06%, 05/24/04^2,4	72,587		72,585
1.09%, 07/15/04^2,4	36,293		36,298
1.51%, 02/15/05^2,4	47,181		47,254
Dorada Finance Inc.
1.05%, 05/20/04^2,4	72,587		72,585
1.24%, 08/09/04²	18,147		18,146
1.48%, 01/18/05^2,4	54,440		54,438
Five Finance Inc.
1.06%, 04/15/04^2,4	36,293		36,293
HBOS Treasury Services PLC
1.16%, 01/24/05²	72,587		72,587
Holmes Financing PLC
1.05%, 04/15/04²	7,259		7,259


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SINGAPORE INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
K2 USA LLC
1.05%, 08/16/04^2,4	$	18,147	$	18,145
1.05%, 09/27/04^2,4		78,394		78,387
1.06%, 05/17/04²		36,293		36,293
1.07%, 04/13/04²		36,293		36,293
1.46%, 01/12/05^2,4		36,293		36,290
Links Finance LLC
1.05%, 06/28/04²		36,293		36,292
1.06%, 07/20/04²		29,035		29,033
1.07%, 03/29/04²		36,293		36,293
1.07%, 05/04/04²		36,293		36,293
Nationwide Building Society
1.09%, 07/23/04^2,4		54,440		54,440
1.17%, 12/28/04^2,4		72,587		72,587
Northern Rock PLC
1.11%, 01/13/05^2,4		68,958		68,958
Permanent Financing PLC
1.06%, 12/10/04²		36,293		36,293
Sigma Finance Inc.
1.06%, 07/01/04²		36,293		36,290
1.06%, 07/20/04²		36,293		36,291
1.09%, 10/07/04²		72,587		72,578
1.24%, 08/06/04²		18,147		18,146
Tango Finance Corp.
1.05%, 01/18/05^2,4		31,938		31,935
1.06%, 07/15/04^2,4		21,776		21,773
1.07%, 02/25/05^2,4		40,649		40,641
1.10%, 07/06/04^2,4		21,776		21,776
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		36,293		36,290
1.32%, 02/04/05^2,4		18,147		18,143
White Pine Finance LLC
1.04%, 08/26/04^2,4		36,293		36,291
1.06%, 04/20/04^2,4		36,293		36,293
1.06%, 07/06/04^2,4		43,552		43,551
1.06%, 11/15/04^2,4		43,552		43,552

				1,845,173

COMMERCIAL PAPER – 0.43%
Amsterdam Funding Corp.
1.03%, 03/03/04²		54,440		54,437
Corporate Asset Funding Corp.
1.03%, 03/16/04²		36,293		36,278
1.05%, 05/21/04²		37,745		37,656
CRC Funding LLC
1.03%, 03/26/04²		29,035		29,014
Delaware Funding Corp.
1.02%, 03/16/04²		73,390		73,359
1.03%, 03/05/04²		32,440		32,437
Edison Asset Securitization
1.03%, 03/03/04²		54,440		54,437
Eureka Securitization Inc.
1.04%, 04/14/04²		43,552		43,497
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		25,405		25,399
Galaxy Funding Inc.
1.05%, 05/17/04²		36,293		36,212
Gemini Securitization Corp.
1.04%, 04/19/04²		18,147		18,121
GIRO Funding US Corp.
1.05%, 05/19/04²		18,147		18,105
Jupiter Securitization Corp.
1.03%, 03/24/04²		36,293		36,270
Liberty Street Funding Corp.
1.03%, 03/10/04²		14,517		14,514
New Center Asset Trust
1.04%, 03/01/04²		18,147		18,147
Park Avenue Receivables Corp.
1.03%, 03/22/04²		29,822		29,804
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		72,587		72,558
1.04%, 05/20/04²		18,147		18,105
Receivables Capital Corp.
1.03%, 03/15/04²		79,120		79,088
Windmill Funding Corp.
1.03%, 03/05/04²		41,447		41,442

				768,880

TIME DEPOSITS – 0.34%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		72,587		72,587
1.33%, 02/10/05²		36,293		36,288
1.39%, 02/02/05²		36,293		36,288
1.40%, 10/25/04²		72,587		72,580


52		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SINGAPORE INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Bank of New York
1.39%, 11/01/04²	$	72,587	$	72,582
Bank of Novia Scotia
1.24%, 10/07/04²		54,440		54,437
1.42%, 10/29/04²		54,440		54,443
SunTrust Bank
1.01%, 03/01/04²		119,768		119,768
Toronto-Dominion Bank
1.34%, 02/10/05²		29,035		29,031
1.41%, 11/01/04²		54,440		54,437

				602,441

U.S. GOVERNMENT AGENCY NOTES – 0.10%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		54,440		54,315
1.28%, 08/19/04²		29,035		28,858
Federal National Mortgage Association
1.28%, 08/20/04²		94,363		93,786

				176,959

REPURCHASE AGREEMENTS – 0.04%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		72,587		72,587

				72,587


TOTAL SHORT-TERM INVESTMENTS (Cost: $6,807,752)				6,807,752

TOTAL INVESTMENTS IN SECURITIES – 103.58% (Cost $159,213,236)				185,152,914
Other Assets, Less Liabilities – (3.58%)				(6,396,834	)

NET ASSETS – 100.00%			$	178,756,080

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Unaudited)

iSHARES MSCI SOUTH AFRICA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.90%
Anglo American PLC	864,300	$	21,616,921
Sasol Ltd.	441,390		6,622,675
Standard Bank Group Ltd.	797,130		4,829,638
Old Mutual PLC	2,727,810		4,822,829
Impala Platinum Holdings Ltd.	50,735		4,210,437
AngloGold Ltd.	88,200		3,739,367
MTN Group Ltd.¹	828,793		3,706,922
Gold Fields Ltd.	272,310		3,357,050
FirstRand Ltd.	2,391,450		3,271,772
Sanlam Ltd.	2,074,710		2,854,032
Anglo American Platinum Corp. Ltd.	62,790		2,784,793
Harmony Gold Mining Co. Ltd.	176,100		2,681,941
Sappi Ltd.	154,830		2,118,481
Bidvest Group Ltd.	226,415		1,804,104
Barloworld Ltd.	173,910		1,768,776
Tiger Brands Ltd.	134,700		1,674,764
Imperial Holdings Ltd.	134,370		1,414,102
Telkom South Africa Ltd.	137,880		1,394,036
Naspers Ltd.	199,290		1,243,409
Liberty Group Ltd.	119,160		985,312
Nampak Ltd.	492,750		985,278
Iscor Ltd.	166,200		859,547
Dimension Data Holdings PLC¹	1,124,730		845,471
Woolworths Holdings Ltd.	730,230		750,924
Anglovaal Industries Ltd.	276,360		712,557
Network Healthcare Holdings Ltd.¹	943,980		637,220
JD Group Ltd.	98,580		615,060
Investec Ltd.	29,850		610,328
African Bank Investments Ltd.	365,400		596,044
Foschini Ltd.	185,250		536,129
Truworths International Ltd.	372,270		531,694
Alexander Forbes Ltd.	269,100		523,919
New Africa Capital Ltd.	434,700		503,223
Pick’n Pay Stores Ltd.	188,370		498,431
Shoprite Holdings Ltd.	331,815		466,432
Metro Cash & Carry Ltd.¹	1,321,890		455,105
Nedcor Ltd.	33,090		318,388
Steinhoff International Holdings Ltd.	60,870		81,081
Bidvest Group Ltd. Warrants (Expire 12/8/06)¹	17,071		14,706

TOTAL COMMON STOCKS (Cost: $62,442,281)			87,442,898

SHORT-TERM INVESTMENTS – 0.04%

MONEY MARKET FUNDS – 0.04%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²	35,866		35,866

			35,866

TOTAL SHORT-TERM INVESTMENTS (Cost: $35,866)			35,866

TOTAL INVESTMENTS IN SECURITIES – 99.94% (Cost $62,478,147)			87,478,764

Other Assets, Less Liabilities – 0.06%			53,039

NET ASSETS – 100.00%		$	87,531,803

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


54		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI SOUTH KOREA INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.24%
Samsung Electronics Co. Ltd.	164,980	$	76,457,568
Kookmin Bank¹	555,969		23,212,651
POSCO	155,940		22,940,153
SK Telecom Co. Ltd.	72,860		14,745,476
Samsung SDI Co. Ltd.	103,960		14,409,422
Hyundai Motor Co. Ltd.	305,100		12,971,939
LG Electronics Inc.	203,406		11,450,236
Korea Electric Power Corp.	522,060		9,189,321
Samsung Electro-Mechanics Co. Ltd.¹	216,960		8,099,102
KT Corp.	213,560		7,899,541
Shinhan Financial Group Ltd.	420,360		7,738,770
Hyundai Mobis Co.	131,080		5,907,517
LG Corp.	117,520		5,746,088
Shinsegae Department Store Co. Ltd.	20,340		4,618,010
Samsung Fire & Marine Insurance Co. Ltd.	70,060		4,509,815
Daeduck Electronics Co. Ltd.	384,241		4,345,583
KT&G Corp.	162,720		3,825,857
Hana Bank	151,813		3,291,864
S-Oil Corp.	90,620		3,282,663
Hyundai Heavy Industries Co. Ltd.	99,440		3,044,082
Samsung Corp.	298,320		2,942,612
Kia Motors Corp.	316,400		2,932,619
Kangwon Land Inc.	234,012		2,795,811
NCsoft Corp.¹	41,744		2,715,490
KT Corp. ADR	141,861		2,698,196
Daewoo Shipbuilding and Marine Engineering Co. Ltd.	212,440		2,474,854
Samsung Securities Co. Ltd.	103,960		2,470,818
Hankook Tire Co. Ltd.	287,020		2,382,071
Humax Co. Ltd.	231,650		2,284,983
SK Telecom Co. Ltd. ADR	87,369		2,185,099
Daelim Industrial Co. Ltd.	58,760		1,978,653
Cheil Jedang Corp.	31,640		1,840,286
Cheil Communications Inc.	11,300		1,729,592
Korea Exchange Bank¹	244,080		1,662,484
Samsung Heavy Industries Co. Ltd.	354,820		1,644,361
S1 Corp.	70,060		1,632,350
LG Petrochemical Co. Ltd.	63,280		1,571,238
LG Investments & Securities Co. Ltd.	185,320		1,564,819
Honam Petrochemical Corp.¹	33,900		1,524,923
Hanjin Shipping Co. Ltd.	83,620		1,493,214
Hite Brewery Co. Ltd.	18,080		1,383,673
Daishin Securities Co. Ltd.	85,880		1,347,352
Amorepacific Corp.	9,040		1,306,803
LG Engineering & Construction Co. Ltd.	79,100		1,294,792
Daum Communications Corp.¹	33,222		1,243,000
Cheil Industries Inc.	90,400		1,222,245
Nong Shim Co. Ltd.	7,122		1,211,225
Korean Air Co. Ltd.¹	67,800		985,867
Hyundai Department Store Co. Ltd.	31,640		914,762
Kumgang Korea Chemical Co. Ltd.	11,300		914,762
Hyundai Securities Co. Ltd.¹	151,420		834,355
Good Morning Securities Co. Ltd.¹	174,524		761,316
LG Household & Health Care Ltd.	22,600		588,061
LG Cable Ltd.	45,200		580,374
YuHan Corp.	9,356		564,861
Samsung Fine Chemicals Co. Ltd.	27,120		419,714
Dongwon Financial Holding Co. Ltd.	69,007		386,697
Hyosung Corp.	32,826		301,460
Poongsan Corp.	22,600		219,082
Daewoo Securities Co. Ltd.¹	47,460		195,127
Dong-A Pharmaceutical Co. Ltd.	9		149
LG Chem Investment Ltd.	6		57
TriGem Computer Inc.¹	7		30

TOTAL COMMON STOCKS (Cost: $225,459,377)			306,885,895
SHORT-TERM INVESTMENTS – 0.19%

MONEY MARKET FUNDS – 0.19%
Barclays Global Investors Funds Institutional Money Market Fund Institutional Shares²	575,709		575,709

			575,709

TOTAL SHORT-TERM INVESTMENTS (Cost: $575,709)			575,709

TOTAL INVESTMENTS IN SECURITIES – 99.43% (Cost $226,035,086)			307,461,604
Other Assets, Less Liabilities – 0.57%			1,759,422

NET ASSETS – 100.00%		$	309,221,026

¹	Non-income earning securities.

²	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Unaudited)

iSHARES MSCI TAIWAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS - 100.01%
Taiwan Semiconductor Manufacturing Co. Ltd.¹	31,815,726	$	60,569,588
United Microelectronics Corp¹	31,815,473		28,996,864
Cathay Financial Holdings Co. Ltd.	9,899,055		19,439,008
Hon Hai Precision Industry Co. Ltd.	4,242,516		18,824,535
China Steel Corp.	14,847,683		15,134,799
Nan Ya Plastic Corp.	10,605,992		14,340,586
AU Optronics Corp¹	7,777,800		12,941,625
Formosa Plastic Corp.	7,777,258		12,590,974
Mega Financial Holdings Co. Ltd.	16,261,136		11,846,668
Asustek Computer Inc.	4,242,156		11,128,426
China Development Financial Holding Co.	19,796,338		11,039,181
Chinatrust Financial Holding Co. Ltd.	9,191,289		10,967,270
Formosa Chemicals & Fibre Corp.	6,363,964		10,112,130
MediaTek Inc.	841,050		9,531,312
Fubon Financial Holding Co. Ltd.	8,484,000		9,029,591
Quanta Computer Inc.	3,535,468		8,956,590
Chunghwa Telecom Co. Ltd.	4,242,000		6,931,165
Compal Electronics Inc.	4,949,910		6,678,038
Acer Inc.	4,242,512		6,677,616
First Financial Holding Co. Ltd.¹	7,777,050		6,435,214
Advanced Semiconductor Engineering Inc.¹	5,656,792		6,376,716
Hua Nan Financial Holdings Co. Ltd.¹	5,656,186		5,307,709
Lite-On Technology Corp.	4,242,631		5,215,046
Taishin Financial Holdings Co. Ltd.	5,656,441		5,138,365
CMC Magnetics Corp.¹	5,656,400		4,883,955
Benq Corp.	3,535,472		4,865,182
Chang Hwa Commercial Bank Ltd.¹	7,070,446		4,811,846
Uni-President Enterprises Corp.	7,070,637		4,154,834
Winbond Electronics Corp.¹	7,777,280		4,127,053
Taiwan Cellular Corp.	4,242,920		4,095,998
Siliconware Precision Industries Co. Ltd.¹	3,535,525		3,847,686
Chunghwa Picture Tubes Ltd.¹	6,363,000		3,719,937
SinoPac Holdings Co.	6,363,393		3,624,778
Walsin Lihwa Corp.¹	7,070,779		3,455,365
Tatung Co. Ltd.¹	8,484,120		3,433,837
Pou Chen Corp.	2,828,616		3,264,929
Ritek Corp.¹	4,242,625		3,090,865
Far Eastern Textile Ltd.	4,242,975		3,052,957
Via Technologies Inc.	2,121,502		2,868,528
Delta Electronics Inc.	2,121,404		2,862,035
President Chain Store Corp.	1,414,653		2,841,605
China Motor Co. Ltd.	1,414,330		2,840,957
International Bank of Taipei	3,535,244		2,755,699
Gigabyte Technology Co. Ltd.	1,414,116		2,670,943
Realtek Semiconductor Corp.	1,414,700		2,629,633
Yang Ming Marine Transport Corp.	2,121,000		2,575,341
Synnex Technology International Corp.	1,414,942		2,460,400
Macronix International Co. Ltd.¹	7,777,200		2,401,594
Inventec Co. Ltd.	3,535,500		2,331,914
Yageo Corp.¹	4,242,100		2,276,528
Yulon Motor Co. Ltd.	1,414,331		2,073,476
Ambit Microsystems Corp.	707,934		2,058,750
Cheng Shin Rubber Industry Co. Ltd.	1,414,604		2,018,742
Taiwan Glass Industrial Corp.	2,121,012		1,882,235
Taiwan Cement Corp.	2,828,187		1,695,810
Zyxel Communication Corp.	707,450		1,643,753
Teco Electric & Machinery Co. Ltd.	3,535,092		1,557,963
Evergreen Marine Corp. Ltd.	1,414,319		1,543,433
Asia Cement Corp.	2,121,740		1,507,577
Advantech Co. Ltd.	707,567		1,442,499
Taiwan Styrene Monomer Corp.	1,414,600		1,335,929
Kinpo Electronics Inc.	2,121,235		1,310,072
Nien Made Enterprise Co. Ltd.	707,000		1,292,970
Cathay Real Estate Development Co. Ltd.¹	2,121,493		1,284,790
Accton Technology Corp.	1,414,259		1,259,286
Premier Image Technology Corp.	707,340		1,187,559
Micro-Star International Co. Ltd.	707,103		1,165,962
EVA Airways Corp.	2,121,222		1,163,794
Wan Hai Lines Ltd.	1,032,368		1,073,997
Formosa Taffeta Co. Ltd.	2,121,762		1,017,784
Sampo Corp.¹	2,121,148		966,615
Giant Manufacturing Co. Ltd.	707,914		946,574
Systex Corp.	1,414,772		941,626
D-Link Corp.	707,585		890,978


56		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI TAIWAN INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Phoenixtec Power Co. Ltd.	709,438	$	889,057
Arima Computer Corp.¹	2,121,600		884,132
Oriental Union Chemical Corp.	707,880		878,616
China Airlines Ltd.¹	1,414,187		856,441
Continental Engineering Corp.	1,414,571		831,227
Compeq Manufacturing Co. Ltd.¹	1,414,200		818,290
Taiwan Secom Co. Ltd.	707,486		793,284
Nien Hsing Textile Co. Ltd.	707,800		732,097
Elitegroup Computer Systems Co. Ltd.	707,300		725,218
Prodisc Technology Inc.¹	707,572		674,585
Shihlin Electric & Engineering Corp.	707,080		523,606
Picvue Electronics Ltd.¹	1,414,040		498,125
Eternal Chemical Co. Ltd.	707,100		491,822
BES Engineering Corp.¹	2,121,366		483,357
WU’S Printed Circuit Co. Ltd.¹	707,000		468,436
Aurora Corp.	610		408
Microelectronics Technology Inc.¹	420		229
Tung Ho Steel Enterprise Corp.¹	210		129
China Synthetic Rubber Corp.¹	236		92
Far Eastern Department Stores Co. Ltd.¹	160		87
Pacific Electric Wire & Cable Co. Ltd.^1,2	986		15

TOTAL COMMON STOCKS (Cost: $371,426,877)			443,964,842

SHORT-TERM INVESTMENTS – 0.10%

MONEY MARKET FUNDS – 0.10%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares³	443,873		443,873

			443,873

TOTAL SHORT-TERM INVESTMENTS (Cost: $443,873)			443,873

TOTAL INVESTMENTS IN SECURITIES – 100.11% (Cost $371,870,750)			444,408,715

Other Assets, Less Liabilities – (0.11%)			(509,390	)

NET ASSETS – 100.00%		$	443,899,325

¹	Non-income earning securities.

²	Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		57

Statements of Assets and Liabilities (Unaudited)

iSHARES, INC.

February 29, 2004


	*iShares MSCI*
	Australia Index Fund			Brazil Index Fund			Canada Index Fund		Emerging Markets Index Fund			Hong Kong Index Fund			Malaysia Index Fund
ASSETS
Investments at cost	$	172,579,398		$	228,666,519		$	259,021,280	$	1,894,928,255		$	524,883,266		$	185,266,595

Foreign currency, at cost	$	69,991		$	—		$	267,300	$	1,789,625		$	221,196		$	29,413

Investments in securities, at value (including securities on loan^a) (Note 1)	$	211,541,272		$	263,074,255		$	328,720,556	$	2,125,164,263		$	614,943,172		$	245,807,023
Foreign currency, at value		69,132			—			266,435		1,841,772			221,629			29,413
Receivables:
Investment securities sold		1,385,227			2,484,606			—		2,521,841			5,242,071			689,376
Dividends and interest		876,274			2,302,926			284,897		3,393,882			145,658			55,975
Capital shares sold		13,093			—			—		—			—			17,064,350

Total Assets		213,884,998			267,861,787			329,271,888		2,132,921,758			620,552,530			263,646,137

LIABILITIES
Payables:
Investment securities purchased		1,406,619			2,189,574			—		2,521,841			5,380,512			17,753,220
Collateral for securities on loan (Note 5)		35,303,241			—			—		330,406,963			66,854,349			—
Advisory fees (Note 2)		158,300			414,636			324,250		1,858,635			490,725			168,839
Distribution fees		67,089			140,002			137,635		—			207,923			71,942

Total Liabilities		36,935,249			2,744,212			461,885		334,787,439			72,933,509			17,994,001

NET ASSETS	$	176,949,749		$	265,117,575		$	328,810,003	$	1,798,134,319		$	547,619,021		$	245,652,136

Net assets consist of:
Paid-in capital	$	149,031,038		$	281,817,567		$	174,495,873	$	1,570,925,371		$	469,341,854		$	213,973,534
Undistributed (distributions in excess of) net investment income		(491,421	)		1,209,875			106,277		(780,010	)		(871,387	)		(257,676	)
Undistributed net realized gain (accumulated net realized loss)		(10,541,496	)		(52,317,513	)		84,511,288		(2,298,306	)		(10,910,583	)		(28,604,150	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		38,951,628			34,407,646			69,696,565		230,287,264			90,059,137			60,540,428

NET ASSETS	$	176,949,749		$	265,117,575		$	328,810,003	$	1,798,134,319		$	547,619,021		$	245,652,136

Shares outstanding		12,800,000			15,850,000			22,500,000		10,400,000			48,750,000			34,650,000

Net asset value per share	$	13.82		$	16.73		$	14.61	$	172.90		$	11.23		$	7.09

^a	Securities on loan with market values of $33,492,695, $-, $-, $310,697,377, $62,816,605 and $-, respectively. See Note 5.

See notes to financial statements.


58		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES, INC.

February 29, 2004


	*iShares MSCI*
	Mexico Index Fund			Pacific ex-Japan Index Fund			Singapore Index Fund			South Africa Index Fund		South Korea Index Fund			Taiwan Index Fund
ASSETS
Investments at cost	$	96,194,424		$	576,000,564		$	159,213,236		$	62,478,147	$	226,035,086		$	371,870,750

Foreign currency, at cost	$	44,682		$	555,359		$	249,462		$	586	$	—		$	135,751

Investments in securities, at value (including securities on loan^a) (Note 1)	$	99,980,064		$	680,423,232		$	185,152,914		$	87,478,764	$	307,461,604		$	444,408,715
Foreign currency, at value		44,730			557,757			247,710			582		—			134,789
Receivables:
Investment securities sold		—			5,574,194			2,452,484			1,998,795		5,811,483			—
Dividends and interest		34			2,085,146			2,589			53,312		2,158,122			100
Capital shares sold		28,547			—			—			—		—			—

Total Assets		100,053,375			688,640,329			187,855,697			89,531,453		315,431,209			444,543,604

LIABILITIES
Payables:
Investment securities purchased		—			5,565,656			2,148,004			1,851,484		5,803,232			—
Collateral for securities on loan (Note 5)		—			22,122,953			6,628,400			—		—			—
Advisory fees (Note 2)		76,259			485,169			162,909			110,777		304,363			481,732
Distribution fees		32,271			—			72,099			37,389		102,588			162,547
Custodian fees		—			—			17,026			—		—			—
Accrued expenses		—			—			71,179			—		—			—

Total Liabilities		108,530			28,173,778			9,099,617			1,999,650		6,210,183			644,279

NET ASSETS	$	99,944,845		$	660,466,551		$	178,756,080		$	87,531,803	$	309,221,026		$	443,899,325

Net assets consist of:
Paid-in capital	$	97,378,761		$	557,443,532		$	172,900,238		$	55,566,355	$	236,491,101		$	413,954,569
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		(103,947	)		(261,627	)		(852,404	)		38,075		525,339			(1,565,613	)
Undistributed net realized gain (accumulated net realized loss)		(1,115,657	)		(1,117,244	)		(19,224,185	)		6,928,548		(9,260,971	)		(41,026,634	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		3,785,688			104,401,890			25,932,431			24,998,825		81,465,557			72,537,003

NET ASSETS	$	99,944,845		$	660,466,551		$	178,756,080		$	87,531,803	$	309,221,026		$	443,899,325

Shares outstanding		5,100,000			8,600,000			28,000,000			1,500,000		11,300,000			35,350,000

Net asset value per share	$	19.60		$	76.80		$	6.38		$	58.35	$	27.36		$	12.56

^a	Securities on loan with market values of $-, $20,897,633, $6,128,388, $-, $- and $-, respectively. See Note 5.

See notes to financial statements.


FINANCIAL STATEMENTS		59

Statements of Operations (Unaudited)

iSHARES, INC.

For the six months ended February 29, 2004


	*iShares MSCI*
	Australia Index Fund			Brazil Index Fund			Canada Index Fund			Emerging Markets Index Fund			Hong Kong Index Fund			Malaysia Index Fund
NET INVESTMENT INCOME
Dividends^a	$	2,425,340		$	6,370,404		$	2,757,628		$	6,467,182		$	3,535,595		$	1,521,264
Interest		2,879			3,924			1,169			25,060			5,513			1,837
Securities lending income		12,087			—			—			342,781			84,368			—

Total investment income		2,440,306			6,374,328			2,758,797			6,835,023			3,625,476			1,523,101

EXPENSES (Note 2)
Advisory fees		371,011			1,018,342			1,129,705			3,319,069			1,154,614			417,130
Distribution fees		157,208			344,034			478,688			—			489,243			176,750

Total expenses		528,219			1,362,376			1,608,393			3,319,069			1,643,857			593,880

Net investment income		1,912,087			5,011,952			1,150,404			3,515,954			1,981,619			929,221

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(1,128,752	)		53,406,655			(5,476,401	)		(1,768,918	)		(409,626	)		(1,408,759	)
In-kind redemptions		—			—			98,965,412			—			5,602,047			—
Foreign currency transactions		102,645			(73,906	)		66,424			(48,943	)		5,998			(3,372	)

Net realized gain (loss)		(1,026,107	)		53,332,749			93,555,435			(1,817,861	)		5,198,419			(1,412,131	)

Net change in unrealized appreciation (depreciation) on:
Investments		27,909,927			19,181,711			(16,684,602	)		200,426,882			79,561,341			29,918,150
Translation of assets and liabilities in foreign currencies		(4,372	)		24,384			(2,874	)		53,488			(685	)		—

Net change in unrealized appreciation (depreciation)		27,905,555			19,206,095			(16,687,476	)		200,480,370			79,560,656			29,918,150

Net realized and unrealized gain		26,879,448			72,538,844			76,867,959			198,662,509			84,759,075			28,506,019

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	28,791,535		$	77,550,796		$	78,018,363		$	202,178,463		$	86,740,694		$	29,435,240

^a	Net of foreign withholding tax of $13,535, $1,046,049, $486,640, $814,050, $- and $397,900, respectively.

See notes to financial statements.


60		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES, INC.

For the six months ended February 29, 2004


	*iShares MSCI*
	Mexico Index Fund			Pacific ex-Japan Index Fund			Singapore Index Fund			South Africa Index Fund			South Korea Index Fund			Taiwan Index Fund
NET INVESTMENT INCOME
Dividends^a	$	391,862		$	6,514,967		$	1,417,881		$	1,060,352		$	2,141,129		$	73,746
Interest		174			3,662			997			102			1,090			1,118
Securities lending income		—			40,436			25,558			—			—			—

Total investment income		392,036			6,559,065			1,444,436			1,060,454			2,142,219			74,864

EXPENSES (Note 2)
Advisory fees		214,237			1,040,026			343,020			319,381			706,311			1,226,215
Distribution fees		90,779			—			183,906			107,903			238,618			414,262
Custodian fees and expenses		—			—			55,302			—			—			—
Directors’ fees		—			—			2,451			—			—			—
Professional fees		—			—			14,286			—			—			—
Federal and state registration fees		—			—			826			—			—			—
Insurance		—			—			749			—			—			—
Printing		—			—			17,163			—			—			—
AMEX listing fee		—			—			221			—			—			—

Total expenses		305,016			1,040,026			617,924			427,284			944,929			1,640,477

Net investment income (loss)		87,020			5,519,039			826,512			633,170			1,197,290			(1,565,613	)

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(17,825	)		(1,675,028	)		(3,860,630	)		(285,528	)		(993,632	)		(1,104,219	)
In-kind redemptions		6,649,883			4,317,918			—			7,768,296			—			—
Foreign currency transactions		(4,689	)		198,246			26,334			(21,878	)		(5,705	)		13,357

Net realized gain (loss)		6,627,369			2,841,136			(3,834,296	)		7,460,890			(999,337	)		(1,090,862	)

Net change in unrealized appreciation (depreciation) on:
Investments		10,925,899			81,655,032			29,218,138			12,540,256			35,359,500			55,031,445
Translation of assets and liabilities in foreign currencies		4,455			(14,684	)		(7,363	)		(3,533	)		39,038			(8,027	)

Net change in unrealized appreciation (depreciation)		10,930,354			81,640,348			29,210,775			12,536,723			35,398,538			55,023,418

Net realized and unrealized gain		17,557,723			84,481,484			25,376,479			19,997,613			34,399,201			53,932,556

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	17,644,743		$	90,000,523		$	26,202,991		$	20,630,783		$	35,596,491		$	52,366,943

^a	Net of foreign withholding tax of $-, $152,014, $385,900, $-, $423,097 and $12,095, respectively.

See notes to financial statements.


FINANCIAL STATEMENTS		61

Statements of Changes in Net Assets

iSHARES, INC.


	*iShares MSCI* *Australia* *Index Fund*						*iShares MSCI* *Brazil* *Index Fund*						*iShares MSCI* *Canada* *Index Fund*
	For the six months ended February 29, 2004 (unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	1,912,087		$	2,634,052		$	5,011,952		$	2,200,072		$	1,150,404		$	4,043,853
Net realized gain (loss)		(1,026,107	)		3,417,876			53,332,749			(38,109,067	)		93,555,435			43,873,019
Net change in unrealized appreciation (depreciation)		27,905,555			12,038,862			19,206,095			53,071,314			(16,687,476	)		100,028,939

Net increase in net assets resulting from operations		28,791,535			18,090,790			77,550,796			17,162,319			78,018,363			147,945,811

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,470,639	)		(2,180,684	)		(5,717,313	)		(733,550	)		(4,394,348	)		(1,067,330	)

Total distributions to shareholders		(4,470,639	)		(2,180,684	)		(5,717,313	)		(733,550	)		(4,394,348	)		(1,067,330	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		65,088,088			8,283,804			240,549,147			52,276,580			88,517,701			505,287,212
Cost of shares redeemed		—			(13,383,892	)		(150,299,666	)		(49,458,528	)		(336,738,527	)		(215,179,302	)

Net increase (decrease) in net assets from capital share transactions		65,088,088			(5,100,088	)		90,249,481			2,818,052			(248,220,826	)		290,107,910

INCREASE (DECREASE) IN NET ASSETS		89,408,984			10,810,018			162,082,964			19,246,821			(174,596,811	)		436,986,391

NET ASSETS:
Beginning of period		87,540,765			76,730,747			103,034,611			83,787,790			503,406,814			66,420,423

End of period	$	176,949,749		$	87,540,765		$	265,117,575		$	103,034,611		$	328,810,003		$	503,406,814

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(491,421	)	$	2,067,131		$	1,209,875		$	1,915,236		$	106,277		$	3,350,221

SHARES ISSUED AND REDEEMED:
Shares sold		5,000,000			800,000			16,800,000			5,350,000			6,500,000			53,800,000
Shares redeemed		—			(1,200,000	)		(9,400,000	)		(7,000,000	)		(25,100,000	)		(19,700,000	)

Net increase (decrease) in shares outstanding		5,000,000			(400,000	)		7,400,000			(1,650,000	)		(18,600,000	)		34,100,000

See notes to financial statements.


62		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *Emerging Markets* *Index Fund*						*iShares MSCI* *Hong Kong* *Index Fund*						*iShares MSCI* *Malaysia* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the period April 7, 2003¹ to August 31, 2003			For the Six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	3,515,954		$	707,065		$	1,981,619		$	4,118,499		$	929,221		$	1,483,772
Net realized gain (loss)		(1,817,861	)		(485,246	)		5,198,419			(1,557,634	)		(1,412,131	)		(1,306,184	)
Net change in unrealized appreciation (depreciation)		200,480,370			29,806,894			79,560,656			32,371,162			29,918,150			4,269,454

Net increase in net assets resulting from operations		202,178,463			30,028,713			86,740,694			34,932,027			29,435,240			4,447,042

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,998,228	)		—			(6,211,899	)		(2,327,202	)		(2,163,298	)		(1,342,811	)

Total distributions to shareholders		(4,998,228	)		—			(6,211,899	)		(2,327,202	)		(2,163,298	)		(1,342,811	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,303,107,875			267,817,496			240,765,163			168,140,088			133,464,243			22,654,462
Cost of shares redeemed		—			—			(24,301,877	)		(49,620,095	)		(14,813,629	)		(19,290,970	)

Net increase (decrease) in net assets from capital share transactions		1,303,107,875			267,817,496			216,463,286			118,519,993			118,650,614			3,363,492

INCREASE IN NET ASSETS		1,500,288,110			297,846,209			296,992,081			151,124,818			145,922,556			6,467,723

NET ASSETS:
Beginning of period		297,846,209			—			250,626,940			99,502,122			99,729,580			93,261,857

End of period	$	1,798,134,319		$	297,846,209		$	547,619,021		$	250,626,940		$	245,652,136		$	99,729,580

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(780,010	)	$	702,264		$	(871,387	)	$	3,358,893		$	(257,676	)	$	976,401

SHARES ISSUED AND REDEEMED:
Shares sold		8,200,000			2,200,000			23,550,000			21,525,000			20,325,000			3,975,000
Shares redeemed		—			—			(2,550,000	)		(6,225,000	)		(2,325,000	)		(3,750,000	)

Net increase in shares outstanding		8,200,000			2,200,000			21,000,000			15,300,000			18,000,000			225,000

¹	Commencement of operations.

See notes to financial statements.


FINANCIAL STATEMENTS		63

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *Mexico* *Index Fund*						*iShares MSCI* *Pacific ex-Japan* *Index Fund*						*iShares MSCI* *Singapore* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	87,020		$	791,154		$	5,519,039		$	5,444,061		$	826,512		$	2,205,148
Net realized gain (loss)		6,627,369			(11,129,490	)		2,841,136			188,729			(3,834,296	)		(4,645,255	)
Net change in unrealized appreciation (depreciation)		10,930,354			16,146,586			81,640,348			27,848,209			29,210,775			11,587,071

Net increase in net assets resulting from operations		17,644,743			5,808,250			90,000,523			33,480,999			26,202,991			9,146,964

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(788,654	)		(1,985,056	)		(9,962,572	)		(2,734,116	)		(3,170,833	)		(1,331,268	)

Total distributions to shareholders		(788,654	)		(1,985,056	)		(9,962,572	)		(2,734,116	)		(3,170,833	)		(1,331,268	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		97,079,822			35,186,944			371,016,852			104,747,751			47,521,492			17,230,968
Cost of shares redeemed		(74,146,501	)		(49,848,527	)		(13,885,777	)		(17,225,922	)		—			(4,970,610	)

Net increase (decrease) in net assets from capital share transactions		22,933,321			(14,661,583	)		357,131,075			87,521,829			47,521,492			12,260,358

INCREASE (DECREASE) IN NET ASSETS		39,789,410			(10,838,389	)		437,169,026			118,268,712			70,553,650			20,076,054

NET ASSETS:
Beginning of period		60,155,435			70,993,824			223,297,525			105,028,813			108,202,430			88,126,376

End of period	$	99,944,845		$	60,155,435		$	660,466,551		$	223,297,525		$	178,756,080		$	108,202,430

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(103,947	)	$	597,687		$	(261,627	)	$	4,181,906		$	(852,404	)	$	1,491,917

SHARES ISSUED AND REDEEMED:
Shares sold		5,600,000			2,500,000			5,200,000			1,900,000			7,900,000			3,500,000
Shares redeemed		(4,500,000	)		(3,700,000	)		(200,000	)		(300,000	)		—			(1,000,000	)

Net increase (decrease) in shares outstanding		1,100,000			(1,200,000	)		5,000,000			1,600,000			7,900,000			2,500,000

See notes to financial statements.


64		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *South Africa* *Index Fund*						*iShares MSCI* *South Korea* *Index Fund*						*iShares MSCI* *Taiwan* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the period February 3, 2003¹ to August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	633,170		$	1,528,524		$	1,197,290		$	1,123,273		$	(1,565,613	)	$	643,699
Net realized gain (loss)		7,460,890			(473,013	)		(999,337	)		(4,733,350	)		(1,090,862	)		(15,291,942	)
Net change in unrealized appreciation (depreciation)		12,536,723			12,462,102			35,398,538			18,288,979			55,023,418			52,075,339

Net increase in net assets resulting from operations		20,630,783			13,517,613			35,596,491			14,678,902			52,366,943			37,427,096


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,182,948	)		—			(1,814,739	)		—			(637,002	)		—

Total distributions to shareholders		(2,182,948	)		—			(1,814,739	)		—			(637,002	)		—


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		11,821,259			68,396,211			120,953,759			66,418,682			157,442,104			55,256,747
Cost of shares redeemed		(24,651,115	)		—			—			(22,948,093	)		—			—

Net increase (decrease) in net assets from capital share transactions		(12,829,856	)		68,396,211			120,953,759			43,470,589			157,442,104			55,256,747

INCREASE IN NET ASSETS		5,617,979			81,913,824			154,735,511			58,149,491			209,172,045			92,683,843

NET ASSETS:
Beginning of period		81,913,824			—			154,485,515			96,336,024			234,727,280			142,043,437


End of period	$	87,531,803		$	81,913,824		$	309,221,026		$	154,485,515		$	443,899,325		$	234,727,280


Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	38,075		$	1,587,853		$	525,339		$	1,142,788		$	(1,565,613	)	$	637,002


SHARES ISSUED AND REDEEMED:
Shares sold		200,000			1,750,000			4,600,000			3,300,000			13,600,000			5,650,000
Shares redeemed		(450,000	)		—			—			(1,150,000	)		—			—

Net increase (decrease) in shares outstanding		(250,000	)		1,750,000			4,600,000			2,150,000			13,600,000			5,650,000

¹	Commencement of operations.

See notes to financial statements.


FINANCIAL STATEMENTS		65

Financial Highlights

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Australia Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	11.22		$	9.36		$	9.24		$	9.93		$	9.99		$	7.75

Income from investment operations:
Net investment income¹		0.19			0.32			0.23			0.24			0.23			0.20
Net realized and unrealized gain (loss)		2.84			1.81			(0.07	)		(0.71	)		(0.04	)		2.29

Total from investment operations		3.03			2.13			0.16			(0.47	)		0.19			2.49

Less distributions from:
Net investment income		(0.43	)		(0.27	)		(0.04	)		(0.20	)		(0.23	)		(0.19	)
Return of capital		—			—			—			(0.02	)		(0.02	)		(0.06	)

Total distributions		(0.43	)		(0.27	)		(0.04	)		(0.22	)		(0.25	)		(0.25	)

Net asset value, end of period	$	13.82		$	11.22		$	9.36		$	9.24		$	9.93		$	9.99

Total return		27.35	%³		23.33	%		1.74	%		(4.77	)%		1.84	%		32.09	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	176,950		$	87,541		$	76,731		$	57,312		$	61,574		$	53,957
Ratio of expenses to average net assets⁴		0.84	%		0.84	%		0.84	%		0.84	%		0.95	%		1.00	%
Ratio of net investment income to average net assets⁴		3.04	%		3.21	%		2.47	%		2.54	%		2.22	%		2.03	%
Portfolio turnover rate²		5	%		8	%		5	%		23	%		36	%		14	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Not annualized.

⁴	Annualized for periods of less than one year.

See notes to financial statements.


66		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Brazil Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Period from Jul. 10, 2000⁷ to Aug. 31, 2000
Net asset value, beginning of period	$	12.19		$	8.30		$	11.20		$	19.25		$	20.22

Income from investment operations:
Net investment income³		0.28			0.32			0.38			0.68			0.02
Net realized and unrealized gain (loss)		4.53			3.68			(3.28	)		(8.09	)		(0.63	)

Total from investment operations		4.81			4.00			(2.90	)		(7.41	)		(0.61	)

Less distributions from:
Net investment income		(0.27	)		(0.11	)		—			(0.56	)		(0.02	)
Net realized gain		—			—			—			—			(0.34	)
Return of capital		—			—			—			(0.08	)		—

Total distributions		(0.27	)		(0.11	)		—			(0.64	)		(0.36	)

Net asset value, end of period	$	16.73		$	12.19		$	8.30		$	11.20		$	19.25

Total return		39.42	%⁵		48.85	%		(25.89	)%		(38.52	)%		(2.97	)%⁵

Ratios/Supplemental data:
Net assets, end of period (000s)	$	265,118		$	103,035		$	83,788		$	14,004		$	18,283
Ratio of expenses to average net assets⁶		0.99	%		0.99	%		0.99	%		0.99	%		0.99	%¹
Ratio of net investment income to average net assets⁶		3.64	%		3.59	%		3.50	%		4.44	%		0.77	%²
Portfolio turnover rate⁴		63	%		85	%		103	%		43	%		64	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.40%.

²	Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 0.37%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Not annualized.

⁶	Annualized for periods of less than one year.

⁷	Commencement of operations.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		67

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Canada Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	12.25		$	9.49		$	10.70		$	16.94		$	13.22		$	9.90

Income from investment operations:
Net investment income³		0.04			0.10			0.07			0.05			0.70			0.07
Net realized and unrealized gain (loss)		2.52			2.69			(1.27	)		(5.92	)		8.08			3.87

Total from investment operations		2.56			2.79			(1.20	)		(5.87	)		8.78			3.94

Less distributions from:
Net investment income		(0.20	)		(0.03	)		(0.01	)		(0.02	)		(0.55	)		(0.09	)
Net realized gain		—			—			—			(0.31	)		(4.39	)		(0.53	)
Return of capital		—			—			—			(0.04	)		(0.12	)		—

Total distributions		(0.20	)		(0.03	)		(0.01	)		(0.37	)		(5.06	)		(0.62	)

Net asset value, end of period	$	14.61		$	12.25		$	9.49		$	10.70		$	16.94		$	13.22

Total return		21.02	%⁵		29.47	%		(11.23	)%		(34.95	)%		67.21	%		39.71	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	328,810		$	503,407		$	66,420		$	28,889		$	22,028		$	9,253
Ratio of expenses to average net assets⁶		0.84	%		0.84	%		0.84	%		0.84	%		1.17	%¹		1.23	%
Ratio of net investment income to average net assets⁶		0.60	%		0.98	%		0.70	%		0.44	%		4.07	%²		0.53	%
Portfolio turnover rate⁴		4	%		10	%		5	%		63	%		64	%		12	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.19%.

²	Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 4.05%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Not annualized.

⁶	Annualized for periods of less than one year.

See notes to financial statements.


68		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI* *Emerging Markets* *Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Period from Apr. 7, 2003⁵ to Aug. 31, 2003
Net asset value, beginning of period	$	135.38		$	101.25

Income from investment operations:
Net investment income¹		0.62			0.78
Net realized and unrealized gain		37.71			33.35

Total from investment operations		38.33			34.13

Less distributions from:
Net investment income		(0.81	)		—

Total distributions		(0.81	)		—

Net asset value, end of period	$	172.90		$	135.38

Total return		28.40	%²		33.72	%²

Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,798,134		$	297,846
Ratio of expenses to average net assets³		0.74	%		0.78	%
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends³		0.74	%		0.72	%
Ratio of net investment income to average net assets³		0.78	%		1.58	%
Portfolio turnover rate⁴		3	%		10	%

¹	Based on average shares outstanding throughout the period.

²	Not annualized.

³	Annualized for periods of less than one year.

⁴	Excludes portfolio securities received or delivered as a result of processing capital shares transactions in Creation Units.

⁵	Commencement of operations.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		69

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Hong Kong Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	9.03		$	7.99		$	8.93		$	13.24		$	11.83		$	6.41

Income from investment operations:
Net investment income¹		0.05			0.23			0.23			0.23			0.33			0.29
Net realized and unrealized gain (loss)		2.30			0.95			(1.11	)		(4.30	)		1.42			5.49

Total from investment operations		2.35			1.18			(0.88	)		(4.07	)		1.75			5.78

Less distributions from:
Net investment income		(0.15	)		(0.14	)		(0.06	)		(0.23	)		(0.32	)		(0.36	)
Return of capital		—			—			—			(0.01	)		(0.02	)		—

Total distributions		(0.15	)		(0.14	)		(0.06	)		(0.24	)		(0.34	)		(0.36	)

Net asset value, end of period	$	11.23		$	9.03		$	7.99		$	8.93		$	13.24		$	11.83

Total return		26.28	%⁴		15.14	%		(9.94	)%		(30.88	)%		14.73	%		90.51	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	547,619		$	250,627		$	99,502		$	52,946		$	79,479		$	77,200
Ratio of expenses to average net assets³		0.84	%		0.84	%		0.84	%		0.84	%		0.94	%		1.01	%
Ratio of net investment income to average net assets³		1.01	%		3.06	%		2.56	%		2.11	%		2.57	%		2.84	%
Portfolio turnover rate²		3	%		10	%		15	%		43	%		21	%		43	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Annualized for periods of less than one year.

⁴	Not annualized.

See notes to financial statements.


70		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Malaysia Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	5.99		$	5.68		$	5.11		$	5.96		$	5.59		$	2.11

Income from investment operations:
Net investment income¹		0.04			0.10			0.08			0.06			0.05			0.01
Net realized and unrealized gain (loss)		1.16			0.30			0.52			(0.85	)		0.37			3.67

Total from investment operations		1.20			0.40			0.60			(0.79	)		0.42			3.68

Less distributions from:
Net investment income		(0.10	)		(0.09	)		(0.03	)		(0.06	)		(0.05	)		(0.01	)
Return of capital		—			—			—			(0.00	)³		(0.00	)³		(0.19	)

Total distributions		(0.10	)		(0.09	)		(0.03	)		(0.06	)		(0.05	)		(0.20	)

Net asset value, end of period	$	7.09		$	5.99		$	5.68		$	5.11		$	5.96		$	5.59

Total return		20.35	%⁴		7.39	%		11.82	%		(13.22	)%		7.57	%		185.81	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	245,652		$	99,730		$	93,262		$	80,877		$	99,206		$	95,251
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.96	%		1.43	%
Ratio of net investment income to average net assets⁵		1.31	%		1.91	%		1.53	%		1.19	%		0.81	%		0.33	%
Portfolio turnover rate²		13	%		35	%		37	%		37	%		18	%		7	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		71

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Mexico Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	15.04		$	13.65		$	15.35		$	16.72		$	13.39		$	8.11

Income from investment operations:
Net investment income³		0.02			0.19			0.32			0.17			0.06			0.06
Net realized and unrealized gain (loss)		4.75			1.72			(1.95	)		(1.36	)		3.69			5.36

Total from investment operations		4.77			1.91			(1.63	)		(1.19	)		3.75			5.42

Less distributions from:
Net investment income		(0.21	)		(0.52	)		(0.07	)		(0.15	)		—			(0.07	)
Net realized gain		—			—			—			(0.03	)		(0.42	)		(0.01	)
Return of capital		—			—			—			—			—			(0.06	)

Total distributions		(0.21	)		(0.52	)		(0.07	)		(0.18	)		(0.42	)		(0.14	)

Net asset value, end of period	$	19.60		$	15.04		$	13.65		$	15.35		$	16.72		$	13.39

Total return		31.96	%⁵		14.60	%		(10.67	)%		(7.02	)%		28.20	%		66.92	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	99,945		$	60,155		$	70,994		$	46,056		$	40,127		$	21,430
Ratio of expenses to average net assets⁶		0.84	%		0.84	%		0.84	%		0.84	%		1.04	%¹		1.26	%
Ratio of net investment income to average net assets⁶		0.24	%		1.43	%		2.05	%		1.12	%		0.35	%²		0.52	%
Portfolio turnover rate⁴		2	%		13	%		8	%		34	%		24	%		18	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.04%.

²	Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 0.35%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Not annualized.

⁶	Annualized for periods of less than one year.

See notes to financial statements.


72		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	iShares MSCI Pacific ex-Japan Index Fund
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Period from Oct. 25, 2001⁵ to Aug. 31, 2002
Net asset value, beginning of period	$	62.03		$	52.51		$	50.03

Income from investment operations:
Net investment income¹		0.94			1.87			1.35
Net realized and unrealized gain		15.34			8.53			1.40

Total from investment operations		16.28			10.40			2.75

Less distributions from:
Net investment income		(1.51	)		(0.88	)		(0.27	)

Total distributions		(1.51	)		(0.88	)		(0.27	)

Net asset value, end of period	$	76.80		$	62.03		$	52.51

Total return		26.50	%³		20.15	%		5.51	%³

Ratios/Supplemental data:
Net assets, end of period (000s)	$	660,467		$	223,298		$	105,029
Ratio of expenses to average net assets⁴		0.50	%		0.50	%		0.50	%
Ratio of net investment income to average net assets⁴		2.65	%		3.47	%		2.87	%
Portfolio turnover rate²		5	%		8	%		5	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Not annualized.

⁴	Annualized for periods of less than one year.

⁵	Commencement of operations.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		73

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Singapore Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	5.38		$	5.01		$	5.34		$	7.58		$	7.93		$	3.30

Income from investment operations:
Net investment income¹		0.03			0.12			0.07			0.07			0.13			0.05
Net realized and unrealized gain (loss)		1.09			0.33			(0.36	)		(2.16	)		(0.21	)		4.70

Total from investment operations		1.12			0.45			(0.29	)		(2.09	)		(0.08	)		4.75

Less distributions from:
Net investment income		(0.12	)		(0.08	)		(0.04	)		(0.07	)		(0.11	)		(0.11	)
Net realized gain		—			—			—			(0.06	)		(0.14	)		—
Return of capital		—			—			—			(0.02	)		(0.02	)		(0.01	)

Total distributions		(0.12	)		(0.08	)		(0.04	)		(0.15	)		(0.27	)		(0.12	)

Net asset value, end of period	$	6.38		$	5.38		$	5.01		$	5.34		$	7.58		$	7.93

Total return		21.01	%⁴		9.30	%		(5.42	)%		(27.89	)%		(1.29	)%		144.52	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	178,756		$	108,202		$	88,126		$	73,704		$	88,719		$	113,438
Ratio of expenses to average net assets³		0.84	%		0.84	%		0.84	%		0.84	%		0.94	%		0.97	%
Ratio of net investment income to average net assets³		1.12	%		2.67	%		1.44	%		1.15	%		1.60	%		0.76	%
Portfolio turnover rate²		3	%		14	%		9	%		32	%		52	%		25	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Annualized for periods of less than one year.

⁴	Not annualized.

See notes to financial statements.


74		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI* *South Africa* *Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Period from Feb. 3, 2003⁵ to Aug. 31, 2003
Net asset value, beginning of period	$	46.81		$	38.72

Income from investment operations:
Net investment income¹		0.39			0.89
Net realized and unrealized gain		12.51			7.20

Total from investment operations		12.90			8.09

Less distributions from:
Net investment income		(1.36	)		—

Total distributions		(1.36	)		—

Net asset value, end of period	$	58.35		$	46.81

Total return		27.83	%²		20.89	%²

Ratios/Supplemental data:
Net assets, end of period (000s)	$	87,532		$	81,914
Ratio of expenses to average net assets³		0.99	%		0.99	%
Ratio of net investment income to average net assets³		1.47	%		3.86	%
Portfolio turnover rate⁴		5	%		17	%

¹	Based on average shares outstanding throughout the period.

²	Not annualized.

³	Annualized for periods of less than one year.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Commencement of operations.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		75

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI South Korea Index Fund*
	Six Months Ended Feb. 29, 2004 (Unaudited)			Year Ended Aug. 31, 2003			Year Ended Aug. 31, 2002			Year Ended Aug. 31, 2001			Period from May 9, 2000⁸ to Aug. 31, 2000
Net asset value, beginning of period	$	23.06		$	21.17		$	13.25		$	18.16		$	20.36

Income from investment operations:
Net investment income (loss)³		0.15			0.19			(0.00	)⁵		0.09			(0.04	)
Net realized and unrealized gain (loss)		4.39			1.70			7.92			(4.90	)		(2.16	)

Total from investment operations		4.54			1.89			7.92			(4.81	)		(2.20	)

Less distributions from:
Net investment income		(0.24	)		—			—			(0.03	)		—
Return of capital		—			—			—			(0.07	)		—

Total distributions		(0.24	)		—			—			(0.10	)		—

Net asset value, end of period	$	27.36		$	23.06		$	21.17		$	13.25		$	18.16

Total return		19.85	%⁶		8.93	%		59.77	%		(26.49	)%		(10.81	)%⁶

Ratios/Supplemental data:
Net assets, end of period (000s)	$	309,221		$	154,486		$	96,336		$	37,767		$	13,622
Ratio of expenses to average net assets⁷		0.99	%		0.99	%		1.00	%		1.01	%		0.99	%¹
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends⁷		0.99	%		0.99	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets⁷		1.25	%		0.98	%		(0.01	)%		0.64	%		(0.63	)%²
Portfolio turnover rate⁴		4	%		39	%		25	%		39	%		55	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.38%.

²	Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (1.02)%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Rounds to less than $0.01.

⁶	Not annualized.

⁷	Annualized for periods of less than one year.

⁸	Commencement of operations.

See notes to financial statements.


76		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Taiwan Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year Ended Aug. 31, 2003			Year Ended Aug. 31, 2002			Year ended Aug. 31, 2001			Period from Jun. 20, 2000⁷ to Aug. 31, 2000
Net asset value, beginning of period	$	10.79		$	8.82		$	9.01		$	16.41		$	19.59

Income from investment operations:
Net investment income (loss)³		(0.05	)		0.04			(0.03	)		(0.03	)		(0.01	)
Net realized and unrealized gain (loss)		1.84			1.93			(0.16	)		(7.37	)		(2.31	)

Total from investment operations		1.79			1.97			(0.19	)		(7.40	)		(2.32	)

Less distributions from:
Net investment income		(0.02	)		—			—			—			(0.32	)
Net realized gain		—			—			—			—			(0.10	)
Return of capital		—			—			—			—			(0.44	)

Total distributions		(0.02	)		—			—			—			(0.86	)

Net asset value, end of period	$	12.56		$	10.79		$	8.82		$	9.01		$	16.41

Total return		16.53	%⁵		22.45	%		(2.11	)%		(45.09	)%		(12.10	)%⁵

Ratios/Supplemental data:
Net assets, end of period (000s)	$	443,899		$	234,727		$	142,043		$	110,786		$	42,667
Ratio of expenses to average net assets⁶		0.99	%		1.31	%		1.33	%		1.60	%		1.56	%¹
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends⁶		0.99	%		0.99	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets⁶		(0.94	)%		0.43	%		(0.28	)%		(0.23	)%		(0.28	)%²
Portfolio turnover rate⁴		1	%		15	%		11	%		30	%		52	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 2.16%.

²	Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (0.89)%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Not annualized.

⁶	Annualized for periods of less than one year.

⁷	Commencement of operations.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		77

Notes to the Financial Statements (Unaudited)

iSHARES, INC.

1. SIGNIFICANT ACCOUNTING POLICIES

These financial statements relate only to the iShares MSCI Australia, iShares MSCI Brazil, iShares MSCI Canada, iShares MSCI Emerging Markets, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds (each a “Fund”, collectively the “Funds”).

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in a particular market, as measured by a particular equity securities index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment advisor utilizes a “passive” or index approach to achieve each Fund’s investment objective. Each of the Funds is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold stocks in fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence.

Each Fund invests in the securities of foreign issuers of a single country or region, which may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; lesser regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war.

Under the Funds’ organizational documents, their officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.

Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.

SECURITY VALUATION

Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark indices used by the Funds. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.


78		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

SECURITY TRANSACTIONS, INCOME RECOGNITION AND EXPENSES

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. Common expenses incurred by the Company prior to December 28, 2001 were allocated to the Funds based on the ratio of average net assets of each Fund to the combined net assets of all funds offered by the Company, or other appropriate method. Other expenses, directly related to a specific fund, were charged to that fund. The expenses for the iShares MSCI Singapore Index Fund are still allocated to that Fund using this methodology. Additional details of the current expense structure may be found in Note 2.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange at the end of each day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.

Foreign currency and assets and liabilities denominated in foreign currency are generally converted into U.S. dollars using the same exchange rates utilized by MSCI in the calculation of the relevant MSCI Indices (currently, the exchange rates as of 4:00 p.m. London time). However, the Company may use a different exchange rate from the rate used by MSCI in the event that the investment advisor concludes that such rate is more appropriate.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

South Korea and Taiwan levy taxes at rates of 16.5% and up to 20.0%, respectively, based on the par value of stock dividends received by the iShares MSCI Emerging Markets, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds. These taxes are paid by the Funds receiving the stock dividends and if any, are disclosed in their respective Statements of Operations.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually by each Fund. Distributions of net realized gains, if any, generally are declared and distributed once a year. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

At August 31, 2003, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:


*iShares MSCI Index Fund*	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			*Capital* and Other Losses			Total Distributable Earnings (Accumulated Losses)
Australia	$	2,925,719	$	8,829,154		$	(8,157,059	)	$	3,597,814
Brazil		1,915,236		2,948,125			(93,396,836	)		(88,533,475	)
Canada		3,350,221		78,400,573			(1,060,679	)		80,690,115
Emerging Markets		702,264		29,797,192			(470,743	)		30,028,713
Hong Kong		3,456,795		8,549,863			(11,258,286	)		748,372
Malaysia		976,401		25,691,452			(22,261,193	)		4,406,660
Mexico		597,687		(7,722,769	)		(7,164,923	)		(14,290,005	)
Pacific ex-Japan		5,183,483		20,071,924			(2,270,339	)		22,985,068
Singapore		1,698,638		(5,390,088	)		(13,484,866	)		(17,176,316	)
South Africa		1,587,853		12,274,784			(345,024	)		13,517,613
South Korea		1,142,789		42,903,439			(5,098,054	)		38,948,174
Taiwan		637,002		7,979,564			(30,401,751	)		(21,785,185	)


NOTES TO THE FINANCIAL STATEMENTS		79

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

For the years ended August 31, 2003 and August 31, 2002, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended February 29, 2004.

The Funds had tax basis net capital loss carryforwards at August 31, 2003, the tax year-end of the Funds, as follows:


*iShares MSCI Index Fund*	Expiring 2007		Expiring 2008		Expiring 2009		Expiring 2010		Expiring 2011		Total
Australia	$	674,889	$	630,985	$	1,971,994	$	3,625,203	$	650,082	$	7,553,153
Brazil		—		—		94,163		1,993,420		90,139,850		92,227,433
Canada		—		—		—		780,114		21,276		801,390
Hong Kong		4,085,707		—		—		4,971,970		2,870,602		11,928,279
Malaysia		8,654,333		—		—		9,819,029		2,898,105		21,371,467
Mexico		—		—		—		1,319,032		2,329,290		3,648,322
Pacific ex-Japan		—		—		—		—		329,461		329,461
Singapore		—		—		—		4,810,766		4,428,316		9,239,082
South Korea		—		—		556,540		666,642		504,041		1,727,223
Taiwan		—		—		—		12,532,361		8,689,663		21,222,024

Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first.

If any of the Funds own shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”, such Funds may elect to mark-to-market annually the shares of the passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.

For the year ended August 31, 2003, each Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Funds’ custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. Repurchase agreements held by the Funds at February 29, 2004 represent collateral from securities on loan. For further information, see Note 5, below.


80		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Barclays Global Fund Advisors (“BGFA”) acts as investment advisor to the Company and is responsible for the investment management of each Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA serves as investment advisor to each Fund pursuant to an Advisory Agreement between the Company and BGFA, as amended on December 28, 2001. Under this agreement, BGFA is responsible for placing purchase and sale orders, providing continuous supervision of the investment portfolio of each Fund, and the general management of the Company’s affairs.

Under the Advisory Agreement, except for the iShares MSCI Singapore Index Fund, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees. Prior to December 28, 2001 and pursuant to the prior advisory agreement, the investment advisory fee earned by and paid to BGFA with respect to each Fund was reduced by the aggregate of such Fund’s fees and expenses (subject to the exceptions in the prior sentence). BGFA also agreed to reimburse each Fund to the extent that the expenses of any Fund (subject to the same exceptions) exceeded the investment advisory fee as stated in the advisory fee tables below. These fee reduction and reimbursement provisions still apply to the iShares MSCI Singapore Index Fund.

For its investment advisory services to the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico and iShares MSCI Singapore Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds) as follows:


*ADVISORY FEE*		*AGGREGATE NET ASSETS*
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion

For its investment advisory services to the iShares MSCI Brazil, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of these four Funds as follows:


*ADVISORY FEE*		*AGGREGATE NET ASSETS*
0.74%		First $2 billion
0.69		Over $2 billion, up to and including $4 billion
0.64		Over $4 billion

For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is entitled to an annual investment advisory fee based on the average net assets of the Fund of 0.50%. For its investment advisory services to the iShares MSCI Emerging Markets Index Fund, BGFA is entitled to an annual investment advisory fee based on the average net assets of the Fund excluding any investments in other iShares Funds, of 0.75%.


NOTES TO THE FINANCIAL STATEMENTS		81

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the relevant MSCI indices. Under a sub-license agreement between BGI and the Funds, the fees for the use of such MSCI indices are paid directly by BGI to MSCI.

BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Funds’ investment advisor. As securities lending agent, BGI receives as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 29, 2004, BGI earned securities lending agent fees as follows:


*iShares MSCI Index fund*	Securities Lending Agent Fees
Australia	$	14,256
Emerging Markets		372,662
Hong Kong		89,747
Pacific ex-Japan		42,198
Singapore		26,012

SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from each Fund (other than the iShares MSCI Pacific ex-Japan and iShares MSCI Emerging Markets Index Funds), not to exceed 0.25% of the average daily net assets of such Fund, for distribution-related services.

Pursuant to an exemptive order issued by the Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Funds’ investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the Master Portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations.

As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.

The iShares MSCI Emerging Markets Index Fund, in order to improve its portfolio liquidity and its ability to track the MSCI Emerging Markets Index, may invest in the shares of other iShares Funds that invest in securities in the Fund’s benchmark index. As of February 29, 2004, the iShares MSCI Emerging Markets Index Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan


82		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

Index Funds. Transactions in shares of these affiliated Exchange Traded Funds (“ETFs”), including dividend income and net realized capital gains (losses) during the six months ended February 29, 2004 were as follows:


*Affiliated ETF*	Number of Shares Held Beginning of Period	Gross Additions	Gross Reductions	Number of Shares Held End of Period	Dividend Income		Net Realized Gain *(Loss)*
iShares MSCI Malaysia Index Fund	294,800	743,200	310,000	728,000	$	52,918	$	(50.842	)
iShares MSCI South Korea Index Fund	123,200	270,400	123,200	270,400		44,413		13,948
iShares MSCI Taiwan Index Fund	391,600	1,027,300	524,084	894,816		15,757		(117,748	)

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, were as follows:


*iShares MSCI Index Fund*	*Purchases*		*Sales*
Australia	$	6,193,131	$	8,508,392
Brazil		247,501,560		160,348,451
Canada		13,447,873		18,382,370
Emerging Markets		35,897,080		31,790,959
Hong Kong		10,402,682		12,781,648
Malaysia		137,450,682		19,983,136
Mexico		1,300,444		2,008,028
Pacific ex-Japan		20,825,622		23,520,216
Singapore		4,688,696		6,818,198
South Africa		4,663,966		6,080,592
South Korea		126,688,282		8,631,199
Taiwan		159,963,975		3,908,726

In-kind transactions for the six months ended February 29, 2004, were as follows:


*iShares MSCI Index Fund*	*In-kind Purchases*		*In-kind Sales*
Australia	$	64,531,079	$	—
Canada		87,183,495		333,071,164
Emerging Markets		1,292,627,364		—
Hong Kong		240,108,779		24,262,444
Mexico		97,036,989		74,127,724
Pacific ex-Japan		367,876,716		13,752,866
Singapore		47,416,748		—
South Africa		11,830,163		24,635,199


NOTES TO THE FINANCIAL STATEMENTS		83

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

At February 29, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


*iShares MSCI Index Fund*	*Tax Cost*		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation
Australia	$	175,788,672	$	37,313,333	$	(1,560,733	)	$	35,752,600
Brazil		229,258,950		35,171,995		(1,356,690	)		33,815,305
Canada		264,087,146		64,964,293		(330,883	)		64,633,410
Emerging Markets		1,895,819,735		234,327,536		(4,983,008	)		229,344,528
Hong Kong		526,726,745		91,547,556		(3,331,129	)		88,216,427
Malaysia		191,432,581		54,462,986		(88,544	)		54,374,442
Mexico		96,308,284		7,610,714		(3,938,934	)		3,671,780
Pacific ex-Japan		579,702,022		101,639,421		(918,211	)		100,721,210
Singapore		162,160,854		23,607,515		(615,455	)		22,992,060
South Africa		62,517,717		25,093,714		(132,667	)		24,961,047
South Korea		229,606,541		79,089,771		(1,234,708	)		77,855,063
Taiwan		382,569,725		71,625,386		(9,786,396	)		61,838,990

4. CAPITAL SHARE TRANSACTIONS

The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:


*iShares MSCI Index Fund*		*Authorized Shares*
Australia		127,800,000
Brazil		500,000,000
Canada		340,200,000
Emerging Markets		500,000,000
Hong Kong		191,400,000
Malaysia		127,800,000

*iShares MSCI Index Fund*		*Authorized Shares*
Mexico		255,000,000
Pacific ex-Japan		500,000,000
Singapore		191,400,000
South Africa		200,000,000
South Korea		200,000,000
Taiwan		200,000,000

The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for purchase of Creation Units of a Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds which are offered in Creation Units solely for cash in U.S. dollars). A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.


84		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to have a value equal of at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.

As of February 29, 2004, certain of the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.


NOTES TO THE FINANCIAL STATEMENTS		85

The iShares^® Family of Funds

Broad Market

iShares Dow Jones U.S. Total Market Index Fund (IYY)

iShares Russell 3000 Index Fund (IWV)

iShares Russell 3000 Growth Index Fund (IWZ)

iShares Russell 3000 Value Index Fund (IWW)

iShares S&P 1500 Index Fund (ISI)

Large Cap

iShares Russell 1000 Index Fund (IWB)

iShares Russell 1000 Growth Index Fund (IWF)

iShares Russell 1000 Value Index Fund (IWD)

iShares S&P 100 Index Fund (OEF)

iShares S&P 500 Index Fund (IVV)

iShares S&P 500/BARRA Growth Index Fund (IVW)

iShares S&P 500/BARRA Value Index Fund (IVE)

Mid Cap

iShares Russell Midcap Index Fund (IWR)

iShares Russell Midcap Growth Index Fund (IWP)

iShares Russell Midcap Value Index Fund (IWS)

iShares S&P MidCap 400 Index Fund (IJH)

iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)

iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)

Small Cap

iShares Russell 2000 Index Fund (IWM)

iShares Russell 2000 Growth Index Fund (IWO)

iShares Russell 2000 Value Index Fund (IWN)

iShares S&P SmallCap 600 Index Fund (IJR)

iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)

iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)

Sector & Industry

iShares Cohen & Steers Realty Majors Index Fund (ICF)

iShares Dow Jones Transportation Average Index Fund (IYT)

iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)

iShares Dow Jones U.S. Energy Sector Index Fund (IYE)

iShares Dow Jones U.S. Financial Sector Index Fund (IYF)

iShares Dow Jones U.S. Financial Services Index Fund (IYG)

iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)

iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)

iShares Dow Jones U.S. Real Estate Index Fund (IYR)

iShares Dow Jones U.S. Technology Sector Index Fund (IYW)

iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)

iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)

iShares Goldman Sachs Natural Resources Index Fund (IGE)

iShares Goldman Sachs Networking Index Fund (IGN)

iShares Goldman Sachs Semiconductor Index Fund (IGW)

iShares Goldman Sachs Software Index Fund (IGV)

iShares Goldman Sachs Technology Index Fund (IGM)

iShares Nasdaq Biotechnology Index Fund (IBB)

Specialty

iShares Dow Jones Select Dividend Index Fund (DVY)

Global Sector

iShares S&P Global Energy Sector Index Fund (IXC)

iShares S&P Global Financials Sector Index Fund (IXG)

iShares S&P Global Healthcare Sector Index Fund (IXJ)

iShares S&P Global Technology Sector Index Fund (IXN)

iShares S&P Global Telecommunications Sector Index Fund (IXP)

International/Broad Market

iShares MSCI EAFE Index Fund (EFA)

iShares MSCI Emerging Markets Index Fund (EEM)

International/Regional

iShares MSCI EMU Index Fund (EZU)

iShares MSCI Pacific ex-Japan Index Fund (EPP)

iShares S&P Europe 350 Index Fund (IEV)

International/Developed Country

iShares MSCI Australia Index Fund (EWA)

iShares MSCI Austria Index Fund (EWO)

iShares MSCI Belgium Index Fund (EWK)

iShares MSCI Canada Index Fund (EWC)

iShares MSCI France Index Fund (EWQ)

iShares MSCI Germany Index Fund (EWG)

iShares MSCI Hong Kong Index Fund (EWH)

iShares MSCI Italy Index Fund (EWI)

iShares MSCI Japan Index Fund (EWJ)

iShares MSCI Netherlands Index Fund (EWN)

iShares MSCI Singapore Index Fund (EWS)

iShares MSCI Spain Index Fund (EWP)

iShares MSCI Sweden Index Fund (EWD)

iShares MSCI Switzerland Index Fund (EWL)

iShares MSCI United Kingdom Index Fund (EWU)

iShares S&P/TOPIX 150 Index Fund (ITF)

International/Emerging Country

iShares MSCI Brazil Index Fund (EWZ)

iShares MSCI Malaysia Index Fund (EWM)

iShares MSCI Mexico Index Fund (EWW)

iShares MSCI South Africa Index Fund (EZA)

iShares MSCI South Korea Index Fund (EWY)

iShares MSCI Taiwan Index Fund (EWT)

iShares S&P Latin America 40 Index Fund (ILF)

Global/Broad Market

iShares S&P Global 100 Index Fund (IOO)

Fixed Income

iShares GS $ InvesTop^™ Corporate Bond Fund (LQD)

iShares Lehman 1-3 Year Treasury Bond Fund (SHY)

iShares Lehman 7-10 Year Treasury Bond Fund (IEF)

iShares Lehman 20+ Year Treasury Bond Fund (TLT)

iShares Lehman Aggregate Bond Fund (AGG)

iShares Lehman TIPS Bond Fund (TIP)

An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.


86		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are distributed by SFI Investments Distribution Co. (SFI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed, issued, sold, or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

Investing involves risk, including possible loss of principal.

^©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, service-marks or registered trademarks are the property of their respective owners.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available with out charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

iShares^® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS

1 800 iSHARES (1 800 474 2737) www.iSHARES.COM


BGI-F-035-02004		BARCLAYS

iShares^®

2004 SEMI – ANNUAL REPORT TO SHAREHOLDERS

FEBRUARY 29, 2004

[GRAPHIC APPEARS HERE]

INDUSTRIAL STRENGTH

INVESTMENT TOOLS

iSHARES MSCI AUSTRIA INDEX FUND

iSHARES MSCI BELGIUM INDEX FUND

iSHARES MSCI EMU INDEX FUND

iSHARES MSCI FRANCE INDEX FUND

iSHARES MSCI GERMANY INDEX FUND

iSHARES MSCI ITALY INDEX FUND

iSHARES MSCI NETHERLANDS INDEX FUND

iSHARES MSCI SPAIN INDEX FUND

iSHARES MSCI SWEDEN INDEX FUND

iSHARES MSCI SWITZERLAND INDEX FUND

iSHARES MSCI UNITED KINGDOM INDEX FUND

Table of Contents


Shareholder Letter		1

Managers’ Discussion & Analysis		4

Schedules of Investments		26

iShares MSCI Austria Index Fund		26

iShares MSCI Belgium Index Fund		29

iShares MSCI EMU Index Fund		32

iShares MSCI France Index Fund		39

iShares MSCI Germany Index Fund		42

iShares MSCI Italy Index Fund		45

iShares MSCI Netherlands Index Fund		48

iShares MSCI Spain Index Fund		51

iShares MSCI Sweden Index Fund		54

iShares MSCI Switzerland Index Fund		57

iShares MSCI United Kingdom Index Fund		60

Financial Statements		64

Financial Highlights		72

Notes to the Financial Statements		83

iShares Family of Funds		90

To Our Shareholders:

While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares^® Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.

With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios - and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.¹ With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.

On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.

[GRAPHIC APPEARS HERE]

Lee T. Kranefuss

President and Chairman of the Board of Directors

iShares, Inc.

¹	Morningstar Principia, BGI analysis 3/04.


SHAREHOLDER LETTER		1

There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs.

This advertising section does not constitute part of the 2004 Semi-Annual Report.


2		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

THIS PAGE INTENTIONALLY LEFT BLANK.

Managers’ Discussion & Analysis

iSHARES^® MSCI AUSTRIA INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
72.90%	75.49%	69.09%	11.06%	11.33%	10.23%	5.98%	6.05%	6.76%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
72.90%	75.49%	69.09%	68.96%	70.99%	62.76%	58.86%	59.71%	68.40%


	FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	26.78%
Materials	[GRAPHIC APPEARS HERE]	18.69%
Telecommunication Services	[GRAPHIC APPEARS HERE]	17.01%
Energy	[GRAPHIC APPEARS HERE]	10.42%
Capital Goods	[GRAPHIC APPEARS HERE]	8.27%
Utilities	[GRAPHIC APPEARS HERE]	5.68%
Transportation	[GRAPHIC APPEARS HERE]	5.52%
Real Estate	[GRAPHIC APPEARS HERE]	4.77%
Diversified Financials	[GRAPHIC APPEARS HERE]	2.72%

The iShares MSCI Austria Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Austrian market, as measured by the MSCI Austria Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 45.03%, while the Index returned 44.12%.

Regulatory constraints, such as those imposed by the Securities and Exchange Commission and the Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “5/50 Rule”, precludes the sum of all the securities weighted over 5% in a fund’s portfolio from exceeding 50% of a fund’s total assets. To comply with the 5/50 Rule, the Fund was obligated to underweight several of the Index’s largest weighted constituents and to overweight others. The combined effect of all the misweights in the Fund had a net positive impact on the


4		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund’s return relative to the Index’s return. In addition, the Fund held Austrian Airlines AG (1.16% of the net assets of the Fund as of February 29, 2004), a non-Index holding, which performed well over the reporting period and contributed positively to the performance of the Fund.

The Austrian market continued to deliver healthy gains during the reporting period. Many Austrian companies have benefited in recent years from their expansion into the emerging, higher-growth central and eastern European markets, including the Czech Republic and Slovenia. Austrian banks, in particular, have taken advantage of the opportunities that these markets offered. As of the close of the reporting period, more than 60% of central and eastern Europe’s banking assets were owned by foreign banks. Of these, more than 25% were Austrian. Erste Bank der Oesterreichischen Sparkassen AG, the largest Fund holding at 20.81% of net assets as of February 29, 2004, has been a leader in this expansion and continues to benefit from its efforts. Having paid roughly U.S. $455 million in September for Postabank, Hungary’s second-largest retail bank, Erste Bank has the largest retail network in central Europe. Austria’s largest bank, Bank Austria Creditanstalt (4.90% of the net assets of the Fund as of February 29, 2004), which also expanded into all major markets in central and eastern Europe, posted strong gains during the reporting period.

During the reporting period, the Austrian market also benefited from improving economic conditions both in the U.S. and in Germany, Austria’s main export market. Export demand increased, in turn boosting industrial and utility companies. Wienerberger Baustoffindustrie AG (5.06% of the net assets of the Fund as of February 29, 2004) benefited from improving economic conditions, as did Flughafen Wien AG (4.36% of the net assets of the Fund as of February 29, 2004).


MANAGERS’ DISCUSSION & ANALYSIS		5

Managers’ Discussion & Analysis

iSHARES^® MSCI BELGIUM INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
80.14%	78.41%	76.29%	(0.73)%	(0.92)%	(3.52)%	6.20%	6.21%	6.40%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
80.14%	78.41%	76.29%	(3.62)%	(4.54)%	(16.39)%	61.46%	61.60%	63.91%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Diversified Financials	[GRAPHIC APPEARS HERE]	31.92%
Banks	[GRAPHIC APPEARS HERE]	18.36%
Utilities	[GRAPHIC APPEARS HERE]	8.86%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	8.13%
Materials	[GRAPHIC APPEARS HERE]	7.45%
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	4.81%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	4.77%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	4.08%
Real Estate	[GRAPHIC APPEARS HERE]	2.93%
Telecommunication Services	[GRAPHIC APPEARS HERE]	2.00%

The iShares MSCI Belgium Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Belgian market, as measured by the MSCI Belgium Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 37.36%, while the Index returned 36.90%.

With more than half of its stock market represented by financial stocks, Belgium’s overall market performance has been largely determined by the direction of the financial sector. During the reporting period, this relationship had a positive effect on the Belgian market.

After struggling with a global economic downturn and the war in Iraq in previous reporting periods, financial stocks largely rebounded during the reporting period as conditions improved for the sector. Corporate earnings levels and equity valuations rose, investor activity increased,


6		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

and the risks associated with war subsided. Fortis, the Fund’s largest holding at 23.79% of net assets as of February 29, 2004, gained during the reporting period. Dexia Group (13.65% of the net assets of the Fund as of February 29, 2004), KBC Bankverzekeringsholding (4.70% of the net assets of the Fund as of February 29, 2004) and Groupe Bruxelles Lambert SA (4.86% of the net assets of the Fund as of February 29, 2004) all posted gains.

As the overall economic landscape improved, the rest of Belgium’s market generally rebounded as well during the reporting period. Food chain Delhaize Group (4.78% of the net assets of the Fund as of February 29, 2004) continued to perform well. Pharmaceutical company UCB SA (4.81% of the net assets of the Fund as of February 29, 2004) gained and utility company Electrabel SA (8.86% of the net assets of the Fund as of February 29, 2004) benefited from improved conditions.


MANAGERS’ DISCUSSION & ANALYSIS		7

Managers’ Discussion & Analysis

iSHARES^® MSCI EMU INDEX FUND

Performance as of 2/29/04

Average Annual Total Returns

Cumulative Total Returns

Year Ended 2/29/04

Inception to 2/29/04

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

59.22%

60.67%

60.08%

(5.75)%

(5.50)%

(5.38)%

(19.20)%

(18.42)%

(18.01)%

Total returns for the period since inception are calculated from the inception date of the Fund (7/25/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

A Fund’s per share net asset value or “NAV” is the value of one share of a Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (7/31/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


	TOP 10 FUND ALLOCATIONS BY COUNTRY (% of Net Assets)
France	[GRAPHIC APPEARS HERE]	28.08%
Germany	[GRAPHIC APPEARS HERE]	20.26%
Netherlands	[GRAPHIC APPEARS HERE]	14.71%
Italy	[GRAPHIC APPEARS HERE]	11.38%
Spain	[GRAPHIC APPEARS HERE]	10.96%
Finland	[GRAPHIC APPEARS HERE]	5.58%
Belgium	[GRAPHIC APPEARS HERE]	3.27%
Ireland	[GRAPHIC APPEARS HERE]	2.15%
Portugal	[GRAPHIC APPEARS HERE]	1.20%
Greece	[GRAPHIC APPEARS HERE]	0.98%

The iShares MSCI Emu Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the European Monetary Union (“EMU”) markets, as measured by the MSCI EMU Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.33%, while the Index returned 27.91%.

European markets began to see signs of recovery during the reporting period. Higher gross domestic product (“GDP”) levels in the U.S. and Asia meant increased demand for many European markets, which also began to experience somewhat higher GDP growth and increased manufacturing levels. In some markets, business confidence levels were unexpectedly high.

The nagging problem for Europe during the reporting period remained the strong euro, which continued to rise sharply against the U.S. dollar, making European exports more expensive and reducing the value of sales and earnings in dollar-denominated markets. As of the end of the reporting period, however, demand from the U.S had been sufficient to compensate for the increase in the euro. And, for U.S. dollar-based investors, the strong euro boosted performance returns.


8		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

EMU banks and insurance companies rebounded from the declines they experienced in previous periods as markets improved and equity valuations lifted. BNP Paribas SA (1.95% of the net assets of the Fund as of February 29, 2004) logged gains during the reporting period, as did Spain’s Banco Santander Central Hispano SA (1.91% of the net assets of the Fund as of February 29, 2004), which also benefited from holdings in Latin American markets.

Telecommunications companies participated in a global rebound for their sector. Telefonica SA (2.89% of the net assets of the Fund as of February 29, 2004), Deutsche Telecom AG (1.87% of the net assets of the Fund as of February 29, 2004), and Nokia OYJ (3.92% of the net assets of the Fund as of February 29, 2004) all logged gains during the reporting period.

French healthcare company Aventis SA (1.97% of the Fund’s net assets as of February 29, 2004) was the strongest performer among the Fund’s ten largest holdings.


MANAGERS’ DISCUSSION & ANALYSIS		9

Managers’ Discussion & Analysis

iSHARES^® MSCI FRANCE INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
57.07%	58.47%	57.59%	2.37%	2.43%	2.68%	9.26%	9.32%	9.52%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
57.07%	58.47%	57.59%	12.45%	12.75%	14.13%	102.51%	103.50%	106.45%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Energy	[GRAPHIC APPEARS HERE]	15.87%
Banks	[GRAPHIC APPEARS HERE]	11.93%
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	10.24%
Capital Goods	[GRAPHIC APPEARS HERE]	6.46%
Media	[GRAPHIC APPEARS HERE]	5.49%
Materials	[GRAPHIC APPEARS HERE]	5.35%
Telecommunication Services	[GRAPHIC APPEARS HERE]	4.93%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	4.62%
Insurance	[GRAPHIC APPEARS HERE]	4.56%
Automobiles & Components	[GRAPHIC APPEARS HERE]	4.12%

The iShares MSCI France Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the French market, as measured by the MSCI France Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.58%, while the Index returned 27.11%.

During the reporting period, France remained steeped in economic slowdown. Its jobless rate reached 9.6%, a three-year high, and its economic growth was expected to lag the rest of Europe due to soft consumer demand and concerns about the strong currency. As the euro appreciated 14% against the U.S. dollar in 2003, France’s manufacturers struggled with a weak export market. However, demand from the U.S. and Asia was sufficient to compensate for the euro’s increase. In January, confidence among French manufacturers climbed to a two-and-a-half-year high as industrial production rose to meet increasing sales levels in France and higher export levels.


10		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Among the ten largest holdings in the Fund, Vivendi Universal SA (3.46% of the net assets of the Fund as of February 29, 2004) was the strongest performer during the reporting period. Following the auction of its television and film divisions, the entertainment company reported an improvement in core profits and anticipated decline in debt. France’s largest drug-maker, Aventis SA (6.85% of the net assets of the Fund as of February 29, 2004) also performed well. Financial companies Societe Generale (its Class A shares were 3.86% of the net assets of the Fund as of February 29, 2004), AXA (4.28% of the net assets of the Fund as of February 29, 2004), and BNP Paribas SA (6.76% of the net assets of the Fund as of February 29, 2004) all posted gains as French financial companies were lifted by the improving global economic conditions that buoyed their counterparts in markets around the world.


MANAGERS’ DISCUSSION & ANALYSIS		11

Managers’ Discussion & Analysis

iSHARES^® MSCI GERMANY INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
80.71%	81.88%	80.86%	(1.40)%	(1.27)%	(1.30)%	5.23%	5.29%	5.72%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
80.71%	81.88%	80.86%	(6.83)%	(6.21)%	(6.34)%	50.17%	50.78%	55.76%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Capital Goods	[GRAPHIC APPEARS HERE]	12.07%
Utilities	[GRAPHIC APPEARS HERE]	11.65%
Automobiles & Components	[GRAPHIC APPEARS HERE]	11.54%
Materials	[GRAPHIC APPEARS HERE]	11.28%
Diversified Financials	[GRAPHIC APPEARS HERE]	9.78%
Telecommunication Services	[GRAPHIC APPEARS HERE]	9.24%
Insurance	[GRAPHIC APPEARS HERE]	8.15%
Software & Services	[GRAPHIC APPEARS HERE]	5.91%
Banks	[GRAPHIC APPEARS HERE]	4.37%
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	3.39%

The iShares MSCI Germany Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 30.54%, while the Index returned 30.65%.

The German market rebounded during the reporting period, due largely to unexpected, and encouraging, economic news. In December, figures revealed that Germany’s trade surplus had widened 2% to a record 135 billion euros in 2003 as exports soared, despite the euro’s gains against the U.S. dollar. The government also began making strides to strengthen the economy. After months of negotiation, Germany agreed on a package of labor and tax measures that amounted to the largest changes to the economy’s economic framework since World War II. For U.S. dollar-based investors, the strengthening euro also enhanced performance returns during the reporting period.


12		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Among the ten largest holdings in the Fund, energy giants RWE AG (3.71% of the net assets of the Fund as of February 29, 2004) and E.ON AG (7.35% of the net assets of the Fund as of February 29, 2004) logged healthy gains as economic conditions improved. Financial companies, as well as telecommunications companies, participated in global strength in their respective industry sectors. Deutsche Bank AG (8.11% of the net assets of the Fund as of February 29, 2004) and Allianz AG (4.67% of the net assets of the Fund as of February 29, 2004) benefited from improving economic conditions, gaining ground during the reporting period. Deutsche Telekom AG (9.24% of the net assets of the Fund as of February 29, 2004) benefited from a rally in technology share prices worldwide. The largest holding at 11.28% of the net assets of the Fund as of February 29, 2004, Siemens AG also posted positive results during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		13

Managers’ Discussion & Analysis

iSHARES^® MSCI ITALY INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
41.06%	42.20%	40.02%	0.96%	1.09%	0.46%	10.63%	10.69%	10.50%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
41.06%	42.20%	40.02%	4.89%	5.56%	2.35%	123.68%	124.65%	121.58%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	23.37%
Telecommunication Services	[GRAPHIC APPEARS HERE]	22.15%
Energy	[GRAPHIC APPEARS HERE]	17.79%
Insurance	[GRAPHIC APPEARS HERE]	13.26%
Utilities	[GRAPHIC APPEARS HERE]	6.83%
Media	[GRAPHIC APPEARS HERE]	4.32%
Diversified Financials	[GRAPHIC APPEARS HERE]	4.04%
Capital Goods	[GRAPHIC APPEARS HERE]	2.13%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	1.75%
Automobiles & Components	[GRAPHIC APPEARS HERE]	1.03%

The iShares MSCI Italy Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Italian market, as measured by the MSCI Italy Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.58%, while the Index returned 27.04%.

Italian markets delivered healthy returns during the reporting period. Financial stocks, along with their counterparts around the world, benefited from improving valuations and renewed investor activity. Italian telecommunications companies generally moved in sync with the telecommunications sector globally, which rebounded from lows experienced in previous reporting periods, buoyed by improving economic conditions. For U.S. dollar-based investors, the strengthening euro also helped to boost returns during the reporting period.


14		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Within the Fund’s largest holdings, financial companies Sanpaulo IMI SpA (4.69% of the net assets of the Fund as of February 29, 2004) and Banca Intesa SpA (4.67% of the net assets of the Fund as of February 29, 2004) recovered from earlier losses to deliver gains for the reporting period, as did insurer Assicurazioni Generali SpA (8.82% of the net assets of the Fund as of February 29, 2004).

One company, however, had a significant impact on financial markets during the reporting period. In December, the Italian markets were shaken by the collapse of Parmalat, Italy’s largest dairy group. The revelation that the company’s financial crisis, which at first had appeared to be a short-term liquidity problem, was instead the result of nearly a decade of fraud, sent ripples through the financial markets and rattled investor confidence. Although Parmalat was a Fund holding at the time of its collapse, the Fund was fully divested of its holding of Parmalat as of February 29, 2004.

While Parlamat’s demise was the largest corporate crisis in Italy, it was not the only one. In January, software company Finmatica revealed that the chairman, as well as three other members of the board and three statutory auditors had been placed under investigation for, among other things, making misleading statements about the company’s fiscal health. In early February, the Italian government approved a bill intended to improve Italy’s system of financial services regulation and provide better guarantees for investors. Finmatica was not a Fund holding at any time during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		15

Managers’ Discussion & Analysis

iSHARES^® MSCI NETHERLANDS INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
53.01%	54.23%	49.24%	(3.89)%	(4.06)%	(2.29)%	4.23%	4.28%	5.76%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
53.01%	54.23%	49.24%	(17.98)%	(18.71)%	(10.94)%	39.09%	39.67%	56.32%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Energy	[GRAPHIC APPEARS HERE]	24.61%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	17.23%
Diversified Financials	[GRAPHIC APPEARS HERE]	13.96%
Media	[GRAPHIC APPEARS HERE]	8.03%
Materials	[GRAPHIC APPEARS HERE]	5.08%
Banks	[GRAPHIC APPEARS HERE]	4.72%
Insurance	[GRAPHIC APPEARS HERE]	4.70%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	4.51%
Telecommunication Services	[GRAPHIC APPEARS HERE]	4.13%
Transportation	[GRAPHIC APPEARS HERE]	3.67%

The iShares MSCI Netherlands Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Dutch market, as measured by the MSCI Netherlands Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 19.65%, while the Index returned 19.65%.

The Dutch market showed signs of recovery during the reporting period. Because the Netherlands has historically depended so heavily on foreign trade, it has been sensitive to the economic strength of its trading partners. As a result, the economic slowdown in the U.S. and major European markets in recent years had a dampening effect on the Dutch economy. By the second quarter of 2003, gross domestic product (“GDP”) had contracted by roughly 0.9% and equity markets languished. However, as the U.S. and some European markets began to experience improved GDP growth and market performance, the economic climate in the Netherlands improved as well, and, as of the end of the reporting


16		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

period, appeared poised for recovery. In particular, those companies that were heavily dependent on exports were buoyed by the apparent global recovery. Unilever NV CVA (11.42% of the net assets of the Fund as of February 29, 2004) and Koninklijke Philips Electronics NV (4.51% of the net assets of the Fund as of February 29, 2004) both enjoyed gains during the reporting period, as foreign trade increased. For U.S. dollar-based investors, the strengthening euro also helped to enhance returns during the reporting period.

Financial stocks, which represent a significant percentage of the Dutch market, benefited along with their counterparts around the world from improved equity valuations and a return of investment to equity markets. ING Groep NV (13.96% of the net assets of the Fund as of February 29, 2004), ABN AMRO Holding NV (4.72% of the net assets of the Fund as of February 29, 2004), and AEGON NV (4.70% of the net assets of the Fund as of February 29, 2004) all performed well during the reporting period.

Supermarket chain Koninklijke Ahold NV (2.39% of the Fund’s net assets as of February 29, 2004), however, remained mired in the aftermath of its woes of early 2003, when it had revealed what it described as “significant accounting irregularities”. The company, which had suffered significant losses in the days immediately following that announcement, continued to lose ground during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		17

Managers’ Discussion & Analysis

iSHARES^® MSCI SPAIN INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
60.87%	61.53%	62.35%	2.51%	2.33%	2.62%	13.59%	13.62%	13.98%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
60.87%	61.53%	62.35%	13.19%	12.22%	13.81%	176.04%	176.64%	183.77%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	31.52%
Telecommunication Services	[GRAPHIC APPEARS HERE]	23.69%
Utilities	[GRAPHIC APPEARS HERE]	15.78%
Energy	[GRAPHIC APPEARS HERE]	4.88%
Capital Goods	[GRAPHIC APPEARS HERE]	4.63%
Food Beverge & Tobacco	[GRAPHIC APPEARS HERE]	4.57%
Media	[GRAPHIC APPEARS HERE]	2.18%
Transportation	[GRAPHIC APPEARS HERE]	2.08%
Retailing	[GRAPHIC APPEARS HERE]	1.97%
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	1.95%

The iShares MSCI Spain Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Spanish market, as measured by the MSCI Spain Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 31.77%, while the Index returned 32.30%.

The Spanish market performed well during the reporting period as the country’s economy continued to improve. Gross domestic product chugged along at an estimated 2.3% for 2003, one of the highest rates in the European Union. Inflation rates, which have been a problem in recent years, finally dropped to a five-year low of 2.3% during the reporting period. For U.S. investors, returns were enhanced by the euro’s continued strengthening against the U.S. dollar during the reporting period.


18		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The largest holding at 23.69% of the net assets of the Fund as of February 29, 2004, Telefonica SA was a strong performer among the ten largest Fund holdings during the reporting period, thanks to a worldwide rebound in the telecommunications sector. Cigarette maker Altadis SA (3.31% of the net assets of the Fund as of February 29, 2004) also logged gains, although it suffered a slight loss in late February on news that its net profit in 2003 fell 33%, as it took a charge for restructuring its French and Spanish operations. Altadis SA countered the drop in revenue with an increased dividend, mitigating the stock’s price decline. Banco Popular Espanol SA (4.57% of the net assets of the Fund as of February 29, 2004) rebounded as equity valuations increased.

In addition, a number of Spanish companies, particularly banks and utilities, have substantial holdings in Latin America. In general, these companies benefited from strong gains in Latin American markets during the reporting period. Three companies in the Fund that had significant Latin American holdings included Banco Santander Central Hispano SA (14.65% of the net assets of the Fund as of February 29, 2004), Banco Bilbao Vizcaya Argentaria SA (10.52% of the net assets of the Fund as of February 29, 2004) and the utility company Endesa SA (4.84% of the net assets of the Fund as of February 29, 2004).


MANAGERS’ DISCUSSION & ANALYSIS		19

Managers’ Discussion & Analysis

iSHARES^® MSCI SWEDEN INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
82.87%	84.16%	83.29%	3.12%	2.90%	4.49%	8.76%	8.84%	10.19%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
82.87%	84.16%	83.29%	16.61%	15.36%	24.54%	95.31%	96.43%	116.75%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Technology Hardware & Equipment	[GRAPHIC APPEARS HERE]	23.46%
Banks	[GRAPHIC APPEARS HERE]	18.97%
Capital Goods	[GRAPHIC APPEARS HERE]	18.70%
Retailing	[GRAPHIC APPEARS HERE]	6.95%
Materials	[GRAPHIC APPEARS HERE]	6.88%
Telecommunication Services	[GRAPHIC APPEARS HERE]	6.54%
Health Care Equipment & Services	[GRAPHIC APPEARS HERE]	3.62%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	3.44%
Commercial Services & Supplies	[GRAPHIC APPEARS HERE]	2.48%
Insurance	[GRAPHIC APPEARS HERE]	1.97%

The iShares MSCI Sweden Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 36.54%, while the Index returned 37.13%.

Sweden’s market delivered one of the best returns in Europe during the reporting period, thanks to relatively healthy economic conditions and an exceptionally strong performer in the Index. Although unemployment remained high, the economy remained fundamentally sound, with healthy gross domestic product growth and a surplus in the external accounts. Citing low domestic cost pressures, a benign inflation outlook and the weakness of the labor market, Sweden’s central bank, the Riksbank lowered its key interest rate in early February. The 0.25% drop brought the rate to 2.50%, its lowest level in nearly 60 years.


20		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The major factor in Sweden’s market performance during the reporting period was the performance of its largest weighting, cellular phone maker Telefonaktiebolaget LM Ericsson. Its Class B shares, which represented 23.46% of the net assets of the Fund as of February 29, 2004, returned nearly 70% during the reporting period as the telecommunications industry around the world demonstrated continued strength. Telecommunications company TeliaSonera AB (4.04% of the net assets of the Fund as of February 29, 2004) also posted modest gains during the reporting period.

The higher equity valuations, lower interest rates and improving economic environment helped to buoy financial companies, including Nordea AB (8.87% of the net assets of the Fund as of February 29, 2004) and Skandinaviska Enskilda Banken AB, whose Class A shares represented 3.90% of the net assets of the Fund as of February 29, 2004.

Economic strength in the U.S. and in Europe also helped Sweden’s foreign trade during the reporting period, benefiting carmaker Volvo AB (whose Class B shares represented 3.48% of the net assets of the Fund as of February 29, 2004) and clothing retailer Hennes & Mauritz AB (whose Class B shares made up 6.95% of the net assets of the Fund as of February 29, 2004).


MANAGERS’ DISCUSSION & ANALYSIS		21

Managers’ Discussion & Analysis

iSHARES^® MSCI SWITZERLAND INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
50.16%	49.27%	51.22%	(0.25)%	(0.48)%	0.22%	5.07%	5.08%	6.79%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
50.16%	49.27%	51.22%	(1.23)%	(2.40)%	1.13%	48.35%	48.48%	68.86%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	28.33%
Diversified Financials	[GRAPHIC APPEARS HERE]	13.58%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	12.33%
Materials	[GRAPHIC APPEARS HERE]	12.18%
Insurance	[GRAPHIC APPEARS HERE]	9.26%
Consumer Durables & Apparel	[GRAPHIC APPEARS HERE]	5.71%
Capital Goods	[GRAPHIC APPEARS HERE]	5.12%
Banks	[GRAPHIC APPEARS HERE]	3.55%
Health Care Equipment & Services	[GRAPHIC APPEARS HERE]	2.77%
Telecommunication Services	[GRAPHIC APPEARS HERE]	2.76%

The iShares MSCI Switzerland Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 24.15%, while the Index returned 25.09%.

After being mired in recession in previous reporting periods, Switzerland showed renewed signs of life during the six months ended February 29, 2004. In November, Swiss leading economic indicators rose to top their highest levels in more than 2¹/2 years. Exports, which made up about 2/3 of the Swiss gross domestic product, gained during the reporting period. The Swiss franc, whose strength in previous reporting periods hindered Switzerland’s foreign trade, dropped against the euro, making Swiss exports more affordable and boosting foreign demand. Industrial production also improved during the reporting period. In an effort to continue the recovery trend, the Swiss National Bank left its benchmark interest rate close to zero during the reporting period.


22		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Benefiting from the improving conditions and the decline of the Swiss franc, consumer discretionary company Compagnie Financiere Richemont AG (whose Class A shares represented 2.81% of the net assets of the Fund as of February 29, 2004) posted gains during the reporting period. Nestle SA, whose registered shares represented 12.33% of the net assets of the Fund as of February 29, 2004, also benefited from these conditions.

Financial giant UBS AG (whose registered shares represented 8.87% of the Fund’s net assets as of February 29, 2004) and Credit Suisse Group (4.71% of the net assets of the Fund as of February 29, 2004) climbed along with financial companies worldwide, in response to economic recovery and improvements in financial markets. Financial companies Zurich Financial Services AG (4.76% of the net assets of the Fund as of February 29, 2004) and Swiss Reinsurance Co. (4.49% of the net assets of the Fund as of February 29, 2004) also gained during the reporting period.

Pharmaceutical companies also demonstrated strength, with both Roche Holding AG (8.28% of the net assets of the Fund as of February 29, 2004) and Novartis AG (the Fund’s largest holding at 18.00% of net assets as of February 29, 2004) delivering solid gains during the reporting period.


MANAGERS’ DISCUSSION & ANALYSIS		23

Managers’ Discussion & Analysis

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

Performance as of 2/29/04


Average Annual Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
48.86%	51.92%	50.55%	(1.05)%	(0.90)%	(0.44)%	7.37%	7.55%	8.04%

Cumulative Total Returns
*Year Ended 2/29/04*			*Five Years Ended 2/29/04*			*Inception to 2/29/04*
*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*	*NAV*	*MARKET*	*INDEX*
48.86%	51.92%	50.55%	(5.12)%	(4.44)%	(2.20)%	76.30%	78.68%	85.22%


	TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Banks	[GRAPHIC APPEARS HERE]	21.24%
Energy	[GRAPHIC APPEARS HERE]	13.29%
Pharmaceuticals & Biotechnology	[GRAPHIC APPEARS HERE]	10.40%
Telecommunication Services	[GRAPHIC APPEARS HERE]	10.28%
Food, Beverage & Tobacco	[GRAPHIC APPEARS HERE]	7.30%
Media	[GRAPHIC APPEARS HERE]	4.61%
Materials	[GRAPHIC APPEARS HERE]	4.32%
Utilities	[GRAPHIC APPEARS HERE]	4.17%
Insurance	[GRAPHIC APPEARS HERE]	3.21%
Food & Staples Retailing	[GRAPHIC APPEARS HERE]	3.10%

The iShares MSCI United Kingdom Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the British market, as measured by the MSCI United Kingdom Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.99%, while the Index returned 27.59%.

The British market delivered broad-based gains as the country’s economy experienced signs of recovery during the reporting period. During the fourth quarter of 2003, gross domestic product grew at an annual rate of 2.5%. A survey of purchasing managers showed that manufacturing activity accelerated in December to the fastest rate in four years. Retail sales growth and housing prices also improved, rising at the fastest pace since April and October of 2002, respectively. The Bank of England raised short-term rates in the face of the overall economic strength. Because of its expectation for strong economic growth in 2004, the chief economic advisor to the U.K. Treasury suggested in January that the Bank of England would likely raise its benchmark interest rate again to “lock in stability”. During the reporting period, the pound reversed course and appreciated against the U.S. dollar, boosting returns for U.S. investors.


24		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Vodafone Group PLC (8.53% of the net assets of the Fund as of February 29, 2004) continued to be a strong performer, moving in step with its telecommunications counterparts around the world. As markets improved and equity valuations rose, financial companies also generally performed well. Barclays PLC (an affiliate of the investment advisor and 2.94% of the net assets of the Fund as of February 29, 2004), HBOS PLC (2.62% of the net assets of the Fund as of February 29, 2004), and Lloyds TSB Group PLC (2.32% of the net assets of the Fund as of February 29, 2004) all gained during the reporting period.

Pharmaceutical companies showed mixed results. On the heels of its success with its popular drug Nexium, AstraZeneca PLC (4.03% of the net assets of the Fund as of February 29, 2004) received favorable news from a study on its blood-thinning drug Exanta, and posted positive returns for the reporting period. GlaxoSmithKline PLC (6.20% of the net assets of the Fund as of February 29, 2004) lost ground for the reporting period, despite FDA approval of its antidepressant Paxil for treatment of premenstrual dysphoric disorder.


MANAGERS’ DISCUSSION & ANALYSIS		25

Schedule of Investments (Unaudited)

iSHARES MSCI AUSTRIA INDEX FUND

February 29, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 99.89%
Erste Bank der Oesterreichischen Sparkassen AG		65,656	$	9,169,320
Telekom Austria AG¹		553,320		8,009,376
OMV AG		26,419		4,259,123
Wienerberger Baustoffindustrie AG		70,702		2,231,320
Oesterreichische Elektrizitaetswirtschafts AG Class A		14,964		2,231,132
Bank Austria Creditanstalt¹		40,426		2,159,860
Immofinanz Immobillien Anlage AG¹		250,067		1,972,997
Flughafen Wien AG		34,771		1,922,532
Mayr-Melnhof Karton AG		15,515		1,890,148
Boehler-Uddeholm AG		24,534		1,859,493
Voest-Alpine AG		38,280		1,752,693
VA Technologie AG¹		35,873		1,458,402
Lenzing AG		7,250		1,432,202
RHI AG¹		60,581		1,302,204
Generali Holding Vienna AG		33,031		1,198,398
Austrian Airlines AG¹		34,046		511,010
CA Immobilien Anlagen AG¹		15,950		380,305
BWT AG		12,412		272,351

TOTAL COMMON STOCKS (Cost: $35,384,781)				44,012,866

SHORT-TERM INVESTMENTS – 24.34%

MONEY MARKET FUNDS – 11.66%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		3,490,304		3,490,304
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		1,287,331		1,287,331
BlackRock Temp Cash Money Market Fund²		59,680		59,680
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		301,009		301,009

				5,138,324

*Security*	*Principal*		*Value*
FLOATING RATE NOTES – 6.75%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	58,515	$	58,513
1.05%, 09/15/04^2,4		117,030		117,024
1.05%, 10/12/04^2,4		58,515		58,511
1.14%, 08/23/04^2,4		58,515		58,539
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		87,773		87,765
1.38%, 11/22/04²		29,258		29,259
1.40%, 10/29/04²		117,030		117,028
CC USA Inc.
1.05%, 04/19/04^2,4		51,493		51,493
1.06%, 05/24/04^2,4		117,030		117,027
1.09%, 07/15/04^2,4		58,515		58,523
1.51%, 02/15/05^2,4		76,070		76,186
Dorada Finance Inc.
1.05%, 05/20/04^2,4		117,030		117,026
1.24%, 08/09/04²		29,258		29,256
1.48%, 01/18/05^2,4		87,773		87,769
Five Finance Inc.
1.06%, 04/15/04^2,4		58,515		58,515
HBOS Treasury Services PLC
1.16%, 01/24/05²		117,030		117,030
Holmes Financing PLC
1.05%, 04/15/04²		11,703		11,703
K2 USA LLC
1.05%, 08/16/04^2,4		29,258		29,256
1.05%, 09/27/04^2,4		126,393		126,382
1.06%, 05/17/04²		58,515		58,514
1.07%, 04/13/04²		58,515		58,515
1.46%, 01/12/05^2,4		58,515		58,510
Links Finance LLC
1.05%, 06/28/04²		58,515		58,511
1.06%, 07/20/04²		46,812		46,808
1.07%, 03/29/04²		58,515		58,515
1.07%, 05/04/04²		58,515		58,515
Nationwide Building Society
1.09%, 07/23/04^2,4		87,773		87,773
1.17%, 12/28/04^2,4		117,030		117,030
Northern Rock PLC
1.11%, 01/13/05^2,4		111,179		111,179


26		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI AUSTRIA INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Permanent Financing PLC
1.06%, 12/10/04²	$	58,515	$	58,515
Sigma Finance Inc.
1.06%, 07/01/04²		58,515		58,510
1.06%, 07/20/04²		58,515		58,511
1.09%, 10/07/04²		117,030		117,016
1.24%, 08/06/04²		29,258		29,256
Tango Finance Corp.
1.05%, 01/18/05^2,4		51,493		51,489
1.06%, 07/15/04^2,4		35,109		35,105
1.07%, 02/25/05^2,4		65,537		65,524
1.10%, 07/06/04^2,4		35,109		35,108
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		58,515		58,509
1.32%, 02/04/05^2,4		29,258		29,252
White Pine Finance LLC
1.04%, 08/26/04^2,4		58,515		58,511
1.06%, 04/20/04^2,4		58,515		58,515
1.06%, 07/06/04^2,4		70,218		70,216
1.06%, 11/15/04^2,4		70,218		70,218

				2,974,930
COMMERCIAL PAPER – 2.81%
Amsterdam Funding Corp.
1.03%, 03/03/04²		87,773		87,768
Corporate Asset Funding Corp.
1.03%, 03/16/04²		58,515		58,490
1.05%, 05/21/04²		60,856		60,713
CRC Funding LLC
1.03%, 03/26/04²		46,812		46,779
Delaware Funding Corp.
1.02%, 03/16/04²		118,324		118,274
1.03%, 03/05/04²		52,302		52,296
Edison Asset Securitization
1.03%, 03/03/04²		87,773		87,768
Eureka Securitization Inc.
1.04%, 04/14/04²		70,218		70,129
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		40,961		40,950
Galaxy Funding Inc.
1.05%, 05/17/04²		58,515		58,384
Gemini Securitization Corp.
1.04%, 04/19/04²		29,258		29,216
GIRO Funding US Corp.
1.05%, 05/19/04²		29,258		29,190
Jupiter Securitization Corp.
1.03%, 03/24/04²		58,515		58,477
Liberty Street Funding Corp.
1.03%, 03/10/04²		23,406		23,400
New Center Asset Trust
1.04%, 03/01/04²		29,258		29,258
Park Avenue Receivables Corp.
1.03%, 03/22/04²		48,082		48,053
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		117,030		116,983
1.04%, 05/20/04²		29,258		29,190
Receivables Capital Corp.
1.03%, 03/15/04²		127,563		127,512
Windmill Funding Corp.
1.03%, 03/05/04²		66,824		66,817

				1,239,647
TIME DEPOSITS – 2.20%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		117,030		117,030
1.33%, 02/10/05²		58,515		58,507
1.39%, 02/02/05²		58,515		58,507
1.40%, 10/25/04²		117,030		117,019
Bank of New York
1.39%, 11/01/04²		117,030		117,022
Bank of Novia Scotia
1.24%, 10/07/04²		87,773		87,767
1.42%, 10/29/04²		87,773		87,777
SunTrust Bank
1.01%, 03/01/04²		193,100		193,100
Toronto-Dominion Bank
1.34%, 02/10/05²		46,812		46,805
1.41%, 11/01/04²		87,773		87,767

				971,301
U.S. GOVERNMENT AGENCY NOTES – 0.65%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		87,773		87,571
1.28%, 08/19/04²		46,812		46,527


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI AUSTRIA INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Federal National Mortgage Association
1.28%, 08/20/04²	$	152,139	$	151,209

				285,307

REPURCHASE AGREEMENTS – 0.27%

Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		117,030		117,030

				117,030

TOTAL SHORT-TERM INVESTMENTS (Cost: $10,726,539)				10,726,539

TOTAL INVESTMENTS IN SECURITIES – 124.23% (Cost $46,111,320)				54,739,405
Other Assets, Less Liabilities – (24.23%)				(10,677,235	)

NET ASSETS – 100.00%			$	44,062,170

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


28		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI BELGIUM INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.64%
Fortis	204,505	$	4,728,754
Dexia Group	146,405		2,714,071
Electrabel SA	5,320		1,761,592
Groupe Bruxelles Lambert SA	16,170		966,388
UCB SA	25,865		957,048
Solvay SA	11,305		955,159
Delhaize Group	17,465		949,820
Interbrew SA	31,570		949,263
KBC Bankverzekeringsholding	16,380		935,385
AGFA-Gevaert NV	28,140		811,164
Colruyt NV	5,845		665,963
Algemene Maatschappij voor Nijverheidskredit NV	10,675		651,114
Cofinimmo	3,955		582,811
Umicore	7,840		525,538
Mobistar SA¹	5,950		398,106
Bekaert NV	6,195		357,077
Omega Pharma SA	6,720		276,288
SA D’Ieteren NV	1,190		247,661
Barco NV	2,520		229,196
Compagnie Maritime Belge SA	1,400		146,379

TOTAL COMMON STOCKS (Cost: $18,639,852)			19,808,777
SHORT-TERM INVESTMENTS – 15.83%
MONEY MARKET FUNDS – 7.68%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²^,3	1,049,813		1,049,813
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	373,292		373,292
BlackRock Temp Cash Money Market Fund²	17,306		17,306
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²	87,285		87,285

			1,527,696


*Security*	*Principal*		*Value*
FLOATING RATE NOTES – 4.34%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	16,968	$	16,967
1.05%, 09/15/04^2,4		33,936		33,934
1.05%, 10/12/04^2,4		16,968		16,967
1.14%, 08/23/04^2,4		16,968		16,975
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		25,452		25,449
1.38%, 11/22/04²		8,484		8,484
1.40%, 10/29/04²		33,936		33,935
CC USA Inc.
1.05%, 04/19/04^2,4		14,932		14,932
1.06%, 05/24/04^2,4		33,936		33,935
1.09%, 07/15/04^2,4		16,968		16,970
1.51%, 02/15/05^2,4		22,058		22,092
Dorada Finance Inc.
1.05%, 05/20/04^2,4		33,936		33,935
1.24%, 08/09/04²		8,484		8,483
1.48%, 01/18/05^2,4		25,452		25,451
Five Finance Inc.
1.06%, 04/15/04^2,4		16,968		16,968
HBOS Treasury Services PLC
1.16%, 01/24/05²		33,936		33,936
Holmes Financing PLC
1.05%, 04/15/04²		3,394		3,394
K2 USA LLC
1.05%, 08/16/04^2,4		8,484		8,483
1.05%, 09/27/04^2,4		36,651		36,647
1.06%, 05/17/04²		16,968		16,968
1.07%, 04/13/04²		16,968		16,968
1.46%, 01/12/05^2,4		16,968		16,966
Links Finance LLC
1.05%, 06/28/04²		16,968		16,967
1.06%, 07/20/04²		13,574		13,573
1.07%, 03/29/04²		16,968		16,968
1.07%, 05/04/04²		16,968		16,968
Nationwide Building Society
1.09%, 07/23/04^2,4		25,452		25,452
1.17%, 12/28/04^2,4		33,936		33,936
Northern Rock PLC
1.11%, 01/13/05^2,4		32,239		32,239


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI BELGIUM INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Permanent Financing PLC
1.06%, 12/10/04²	$	16,968	$	16,968
Sigma Finance Inc.
1.06%, 07/01/04²		16,968		16,966
1.06%, 07/20/04²		16,968		16,967
1.09%, 10/07/04²		33,936		33,932
1.24%, 08/06/04²		8,484		8,484
Tango Finance Corp.
1.05%, 01/18/05^2,4		14,932		14,930
1.06%, 07/15/04^2,4		10,181		10,179
1.07%, 02/25/05^2,4		19,004		19,000
1.10%, 07/06/04^2,4		10,181		10,180
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		16,968		16,966
1.32%, 02/04/05^2,4		8,484		8,482
White Pine Finance LLC
1.04%, 08/26/04^2,4		16,968		16,967
1.06%, 04/20/04^2,4		16,968		16,968
1.06%, 07/06/04^2,4		20,361		20,361
1.06%, 11/15/04^2,4		20,361		20,361

				862,653

COMMERCIAL PAPER – 1.81%
Amsterdam Funding Corp.
1.03%, 03/03/04²		25,452		25,450
Corporate Asset Funding Corp.
1.03%, 03/16/04²		16,968		16,961
1.05%, 05/21/04²		17,647		17,605
CRC Funding LLC
1.03%, 03/26/04²		13,574		13,565
Delaware Funding Corp.
1.02%, 03/16/04²		34,311		34,296
1.03%, 03/05/04²		15,166		15,164
Edison Asset Securitization
1.03%, 03/03/04²		25,452		25,450
Eureka Securitization Inc.
1.04%, 04/14/04²		20,361		20,336
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		11,877		11,874
Galaxy Funding Inc.
1.05%, 05/17/04²		16,968		16,930
Gemini Securitization Corp.
1.04%, 04/19/04²		8,484		8,472
GIRO Funding US Corp.
1.05%, 05/19/04²		8,484		8,464
Jupiter Securitization Corp.
1.03%, 03/24/04²		16,968		16,957
Liberty Street Funding Corp.
1.03%, 03/10/04²		6,787		6,785
New Center Asset Trust
1.04%, 03/01/04²		8,484		8,484
Park Avenue Receivables Corp.
1.03%, 03/22/04²		13,942		13,934
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		33,936		33,922
1.04%, 05/20/04²		8,484		8,464
Receivables Capital Corp.
1.03%, 03/15/04²		36,990		36,975
Windmill Funding Corp.
1.03%, 03/05/04²		19,377		19,375

				359,463

TIME DEPOSITS – 1.42%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		33,936		33,936
1.33%, 02/10/05²		16,968		16,965
1.39%, 02/02/05²		16,968		16,965
1.40%, 10/25/04²		33,936		33,932
Bank of New York
1.39%, 11/01/04²		33,936		33,933
Bank of Novia Scotia
1.24%, 10/07/04²		25,452		25,450
1.42%, 10/29/04²		25,452		25,453
SunTrust Bank
1.01%, 03/01/04²		55,994		55,994
Toronto-Dominion Bank
1.34%, 02/10/05²		13,574		13,572
1.41%, 11/01/04²		25,452		25,450

				281,650

U.S. GOVERNMENT AGENCY NOTES – 0.41%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		25,452		25,393
1.28%, 08/19/04²		13,574		13,492


30		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI BELGIUM INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Federal National Mortgage Association
1.28%, 08/20/04²	$	44,116	$	43,847

				82,732

REPURCHASE AGREEMENTS – 0.17%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		33,936		33,936

				33,936

TOTAL SHORT-TERM INVESTMENTS (Cost: $3,148,130)				3,148,130

TOTAL INVESTMENTS IN SECURITIES – 115.47% (Cost $21,787,982)				22,956,907
Other Assets, Less Liabilities – (15.47%)				(3,075,811	)

NET ASSETS – 100.00%			$	19,881,096

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Unaudited)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 98.64%
AUSTRIA – 0.76%
Bank Austria Creditanstalt¹	4,656	$	248,758
Boehler-Uddeholm AG	1,067		80,871
Erste Bank der Oesterreichischen Sparkassen AG	3,492		487,682
Flughafen Wien AG	291		16,090
Immofinanz Immobillien Anlage AG¹	19,206		151,533
Mayr-Melnhof Karton AG	873		106,355
Oesterreichische Elektrizitaetswirtschafts AG Class A	776		115,702
OMV AG	1,746		281,480
RHI AG¹	4,171		89,657
Telekom Austria AG¹	27,645		400,165
VA Technologie AG¹	1,843		74,926
Voest-Alpine AG	2,813		128,796
Wienerberger Baustoffindustrie AG	4,559		143,880

			2,325,895
BELGIUM – 3.27%
AGFA-Gevaert NV	10,476		301,981
Barco NV	1,261		114,689
Bekaert NV	2,328		134,185
Cofinimmo	388		57,176
Colruyt NV	2,231		254,194
Compagnie Maritime Belge SA	679		70,994
Delhaize Group	8,924		485,325
Dexia Group	75,563		1,400,794
Electrabel SA	3,492		1,156,293
Fortis	122,123		2,823,841
Groupe Bruxelles Lambert SA	8,730		521,742
Interbrew SA	18,333		551,246
KBC Bankverzekeringsholding	10,864		620,392
Mobistar SA¹	2,425		162,253
Omega Pharma SA	2,522		103,690
SA D’Ieteren NV	388		80,750
Solvay SA	7,566		639,251
UCB SA	9,797		362,505
Umicore	2,134		143,048

			9,984,349
FINLAND – 5.58%
Amer Group Ltd.	2,522	$	123,463
Elisa OYJ Class A¹	15,617		262,926
Fortum OYJ	42,195		446,680
KCI Konecranes OYJ	1,358		48,089
Kesko OYJ	7,081		142,090
Kone OYJ Class B	3,880		241,045
Metso OYJ	11,543		154,609
Nokia OYJ	547,080		11,983,938
Nokian Renkaat OYJ	1,164		98,375
Orion-Yhtyma OYJ Class B	3,395		87,445
Outokumpu OYJ	11,640		158,367
Pohjola Group PLC Class D	2,231		62,176
Rautaruukki OYJ¹	10,875		91,342
Sampo OYJ Class A	32,204		361,322
Stora Enso OYJ Class R	73,623		977,885
TietoEnator OYJ	9,991		322,759
UPM-Kymmene OYJ	61,401		1,209,208
Uponor OYJ	5,141		171,190
Wartsila OYJ Class B	3,492		81,136

			17,024,045
FRANCE – 28.08%
Accor SA	23,183		1,017,100
Air France	8,342		171,229
Alcatel SA Class A¹	140,747		2,276,913
ALSTOM¹	112,948		301,726
Arcelor	41,613		760,568
Atos Origin SA¹	4,074		284,481
Autoroutes du Sud de la France	8,924		318,560
Aventis SA	78,570		6,013,591
AXA	163,251		3,748,472
BNP Paribas SA	94,478		5,969,226
Bouygues SA	22,407		825,198
Business Objects SA¹	7,954		240,944
Cap Gemini SA¹	12,850		532,630
Carrefour SA	66,542		3,600,646
CNP Assurances	3,492		201,494
Compagnie de Saint-Gobain	36,860		1,934,989
Compagnie Generale des Etablissements Michelin Class B	16,102		776,261


32		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Credit Agricole SA	73,332	$	1,886,081
Dassault Systemes SA	6,208		270,742
Essilor International SA	11,349		650,767
Etablissements Economiques du Casino Guichard-Perrachon SA	4,365		432,796
European Aeronautic Defence and Space Co.	34,435		796,238
France Telecom¹	125,130		3,446,859
Gecina SA	3,312		249,996
Groupe Danone	14,162		2,468,759
Groupe Wanadoo SA¹	49,955		544,346
Hermes International	1,067		211,192
Imerys SA	1,164		254,977
Klepierre	2,522		171,407
Lafarge SA	19,598		1,687,491
Lagardere S.C.A	14,453		875,445
L’Air Liquide SA	11,555		2,047,321
L’Oreal SA	38,897		3,196,998
LVMH Moet Hennessy Louis Vuitton SA	27,839		2,127,282
Pernod Ricard SA	6,160		755,813
Pinault-Printemps-Redoute SA	7,760		837,872
PSA Peugeot Citroen SA	19,497		970,212
Publicis Groupe	11,834		409,058
Renault SA	19,788		1,380,537
Sagem SA	1,785		199,940
Sanofi-Synthelabo SA	42,195		2,883,501
Schneider Electric SA	24,153		1,605,541
Societe BIC SA	3,395		146,754
Societe Generale Class A	38,218		3,392,865
Societe Television Francaise 1	13,386		460,709
Sodexho Alliance SA	11,737		384,414
Suez SA	93,023		2,065,434
Technip-Coflexip SA	2,242		311,997
Thales SA	9,409		357,969
Thomson	27,257		517,146
Total SA	71,683		13,092,721
Unibail Holding	4,947		496,342
Valeo SA	9,118		419,744
Veolia Environnement	28,324		846,381
Vinci SA	7,760		704,816
Vivendi Universal SA¹	105,730		3,028,068
Zodiac SA	5,820		181,001

			85,741,560
GERMANY – 19.55%
adidas-Salomon AG	5,238		588,993
Allianz AG	33,623		4,188,520
ALTANA AG	8,342		510,888
BASF AG	62,856		3,342,619
Bayer AG	77,018		2,181,843
Bayerische Hypo-und Vereinsbank AG¹	43,262		949,279
Beiersdorf AG	2,014		221,212
Celesio AG	3,007		157,668
Commerzbank AG	58,103		1,128,376
Continental AG	14,550		596,044
DaimlerChrysler AG	99,813		4,483,238
Deutsche Bank AG	61,110		5,239,113
Deutsche Boerse AG	11,931		686,215
Deutsche Lufthansa AG	20,661		369,667
Deutsche Post AG	47,530		1,129,151
Deutsche Telekom AG¹	291,485		5,696,936
Douglas Holding AG	3,589		111,171
E.ON AG	72,265		4,884,536
EPCOS AG¹	6,111		145,708
Fresenius Medical Care AG	3,977		266,540
HeidelbergerCement AG¹	5,860		262,118
Hypo Real Estate Holding AG¹	15,380		439,522
Infineon Technologies AG¹	70,519		999,743
KarstadtQuelle AG	4,850		121,667
Linde AG	9,894		519,883
MAN AG	13,483		471,922
Merck KGaA	5,044		222,485
METRO AG	17,393		778,205
MLP AG¹	7,372		169,455
Muenchener Rueckversicherungs-Gesellschaft AG	17,404		2,029,457
Puma AG	1,746		357,778
RWE AG	48,015		2,120,268
SAP AG	23,765		3,750,058
Schering AG	18,721		926,712
Siemens AG	93,217		7,186,763


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Suedzucker AG	5,820	$	112,231
ThyssenKrupp AG	38,897		753,457
TUI AG	16,005		368,293
Volkswagen AG	26,287		1,234,608

			59,702,342
GREECE – 0.98%
Hellenic Telecommunications Organization SA ADR	170,817		1,298,209
National Bank of Greece SA ADR	295,953		1,695,811

			2,994,020
IRELAND – 2.15%
Allied Irish Banks PLC	100,395		1,524,332
Bank of Ireland	115,818		1,515,308
CRH PLC	64,117		1,338,378
DCC PLC	9,700		144,627
Elan Corp. PLC¹	44,717		630,616
Fyffes PLC	37,927		80,111
Grafton Group PLC¹	18,624		138,842
Greencore Group PLC	16,296		67,628
Independent News & Media PLC	58,200		146,073
Irish Life & Permanent PLC	30,943		503,652
Kerry Group PLC Class A	16,587		313,262
Ryanair Holdings PLC¹	21,760		128,425
Waterford Wedgwood PLC	46,315		14,962
Waterford Wedgwood PLC Restricted	9,511		3,073

			6,549,289
ITALY – 10.82%
Alleanza Assicurazioni SpA	56,066		658,306
Arnoldo Mondadori Editore SpA	16,781		167,220
Assicurazioni Generali SpA	111,744		3,019,812
Autogrill SpA¹	14,550		204,105
Autostrade SpA¹	22,989		419,603
Banca Antonveneta Spa Foreign	25,026		493,164
Banca Fideuram SpA	33,950		212,180
Banca Intesa SpA	422,931		1,571,220
Banca Monte dei Paschi di Siena SpA	123,578		403,057
Banca Nazionale del Lavoro SpA¹	194,000		506,195
Banca Popolare di Milano Scrl	49,179		317,135
Banca Popolare di Verona e Novaro Scrl	43,941		758,894
Banche Popolari Unite Scrl¹	35,793		635,516
Benetton Group SpA	6,596		74,170
Bulgari SpA	16,684		147,182
Capitalia SpA¹	149,107		440,005
Enel SpA	268,512		2,075,155
ENI SpA	306,035		5,996,519
Fiat SpA¹	51,798		399,670
Fineco SpA¹	215,825		139,175
Finmeccanica SpA	706,257		601,982
Gruppo Editoriale L’Espresso SpA	20,079		124,242
Italcementi SpA	12,513		152,676
Luxottica Group SpA	16,199		275,743
Mediaset SpA	69,646		800,450
Mediobanca SpA	56,454		683,905
Mediolanum SpA	31,719		230,159
Pirelli SpA	212,159		217,476
Riunione Adriatica di Sicurta SpA	34,629		629,048
Sanpaolo IMI SpA	119,892		1,541,796
Seat Pagine Gialle SpA¹	386,880		388,404
Snam Rete Gas SpA	106,215		490,936
Sorin SpA¹	16,859		48,912
Telecom Italia Media SpA¹	169,482		81,706
Telecom Italia Mobile SpA	432,620		2,445,763
Telecom Italia SpA¹	944,229		2,968,207
Tiscali SpA¹	23,183		160,443
UniCredito Italiano SpA	487,716		2,569,385

			33,049,516
NETHERLANDS – 14.71%
ABN AMRO Holding NV	178,577		4,124,785
AEGON NV	156,522		2,316,240
Akzo Nobel NV	31,428		1,210,138
ASML Holding NV¹	53,253		982,578
Corio NV	3,395		144,139
DSM NV	8,633		408,787
Euronext NV	10,185		277,521
Hagemeyer NV	46,657		110,725
Heineken NV	22,698		964,517
IHC Caland NV	3,492		169,648
ING Groep NV	202,827		4,959,607
Koninklijke Ahold NV¹	123,899		1,029,889
Koninklijke KPN NV¹	244,537		1,929,366


34		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Koninklijke Numico NV CVA¹	17,654	$	581,719
Koninklijke Philips Electronics NV	152,096		4,620,543
Koninklijke Vendex KBB NV	9,797		167,984
Oce NV	8,924		171,865
QIAGEN NV¹	15,326		208,516
Reed Elsevier NV	70,519		967,323
Rodamco Europe NV	4,850		301,246
Royal Dutch Petroleum Co.	242,015		11,937,934
TPG NV	40,255		878,796
Unilever NV CVA	65,863		4,775,059
Vedior NV	11,446		179,762
VNU NV	25,802		840,587
Wereldhave NV	1,358		112,797
Wolters Kluwer NV CVA	31,622		564,602

			44,936,673
PORTUGAL – 1.20%
Banco BPI SA Registered	52,283		209,176
Banco Comercial Portugues SA Class R	251,441		634,203
Banco Espirito Santo SA	13,871		245,078
Brisa-Auto Estradas dePortugal SA	35,793		259,721
CIMPOR-Cimentos de Portugal SGPS SA	25,123		132,665
Electricidade de Portugal SA	225,040		637,516
Jeronimo Martins SGPS SA¹	5,723		68,975
Portugal Telecom SGPS SA	103,499		1,167,665
PT Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS SA¹	5,917		135,863
Sonae SGPS SA¹	147,343		181,243

			3,672,105
SPAIN – 10.96%
Abertis Infraestructuras SA	26,319		420,866
Acciona SA	3,201		206,817
Acerinox SA	6,111		280,179
Actividades de Construccion y Servicios SA	11,370		575,261
Altadis SA	32,398		1,042,592
Amadeus Global Travel Distribution SA Class A	35,599		211,870
Antena 3 Television SA¹	1,902		84,698
Banco Bilbao Vizcaya Argentaria SA	375,972		5,185,312
Banco Popular Espanol SA	18,624		1,130,405
Banco Santander Central Hispano SA	504,497		5,842,126
Corporacion Mapfre SA	10,185		149,580
Endesa SA	103,790		2,031,105
Fomento de Construcciones y Contratas SA	6,111		223,839
Gas Natural SDG SA	23,086		575,121
Grupo Ferrovial SA	7,372		268,929
Iberdrola SA	88,755		1,830,616
Iberia Lineas Aereas de Espana SA	49,276		171,431
Indra Sistemas SA	13,192		180,138
Industria de Diseno Textil SA	26,488		579,240
NH Hoteles SA¹	10,670		124,885
Promotora de Infomaciones SA	9,603		175,993
Repsol YPF SA	108,931		2,233,222
Sacyr Vallehermoso SA	13,580		232,343
Sociedad General de Aguas de Barcelona SA	7,566		124,372
Telefonica Publicidad e Informacion SA	21,340		166,514
Telefonica SA	542,643		8,812,237
Union Fenosa SA	23,668		485,812
Zeltia SA	19,885		132,924

			33,478,427
SWITZERLAND – 0.58%
STMicroelectronics NV	68,676		1,779,129

			1,779,129

TOTAL COMMON STOCKS (Cost: $265,499,157)			301,237,350
PREFERRED STOCKS – 1.27%
GERMANY – 0.71%
Fresenius Medical Care AG	2,813		127,538
Henkel KGaA	7,178		606,380
Porsche AG	970		564,479
ProSiebenSat.1 Media AG	9,700		204,888


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	Shares or Principal		*Value*
RWE AG		3,298	$	125,638
Volkswagen AG		12,513		399,724
Wella AG		1,649		151,126

				2,179,773

ITALY – 0.56%
Banca Intesa SpA RNC		104,663		297,150
Telecom Italia SpA RNC¹		635,582		1,409,633

				1,706,783

TOTAL PREFERRED STOCKS (Cost: $3,053,526)				3,886,556

SHORT-TERM INVESTMENTS – 24.46%

MONEY MARKET FUNDS – 11.72%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		24,335,897		24,335,897
\Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		8,957,822		8,957,822
BlackRock Temp Cash Money Market Fund²		415,279		415,279
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²		2,094,550		2,094,550

				35,803,548
FLOATING RATE NOTES – 6.78%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	407,174		407,160
1.05%, 09/15/04^2,4		814,347		814,303
1.05%, 10/12/04^2,4		407,174		407,149
1.14%, 08/23/04^2,4		407,174		407,342
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		610,761		610,705
1.38%, 11/22/04²		203,587		203,598
1.40%, 10/29/04²		814,347		814,334
CC USA Inc.
1.05%, 04/19/04^2,4		358,313		358,311
1.06%, 05/24/04^2,4		814,347		814,329
1.09%, 07/15/04^2,4		407,174		407,228
1.51%, 02/15/05^2,4		529,326		530,136

*Security*	*Principal*		*Value*
Dorada Finance Inc.
1.05%, 05/20/04^2,4	$	814,347	$	814,321
1.24%, 08/09/04²		203,587		203,573
1.48%, 01/18/05^2,4		610,761		610,734
Five Finance Inc.
1.06%, 04/15/04^2,4		407,174		407,174
HBOS Treasury Services PLC
1.16%, 01/24/05²		814,347		814,347
Holmes Financing PLC
1.05%, 04/15/04²		81,435		81,435
K2 USA LLC
1.05%, 08/16/04^2,4		203,587		203,573
1.05%, 09/27/04^2,4		879,495		879,420
1.06%, 05/17/04²		407,174		407,169
1.07%, 04/13/04²		407,174		407,171
1.46%, 01/12/05^2,4		407,174		407,138
Links Finance LLC
1.05%, 06/28/04²		407,174		407,147
1.06%, 07/20/04²		325,739		325,714
1.07%, 03/29/04²		407,174		407,174
1.07%, 05/04/04²		407,174		407,170
Nationwide Building Society
1.09%, 07/23/04^2,4		610,761		610,761
1.17%, 12/28/04^2,4		814,347		814,347
Northern Rock PLC
1.11%, 01/13/05^2,4		773,630		773,630
Permanent Financing PLC
1.06%, 12/10/04²		407,174		407,174
Sigma Finance Inc.
1.06%, 07/01/04²		407,174		407,140
1.06%, 07/20/04²		407,174		407,142
1.09%, 10/07/04²		814,347		814,250
1.24%, 08/06/04²		203,587		203,578
Tango Finance Corp.
1.05%, 01/18/05^2,4		358,313		358,281
1.06%, 07/15/04^2,4		244,304		244,274
1.07%, 02/25/05^2,4		456,035		455,945
1.10%, 07/06/04^2,4		244,304		244,296
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		407,174		407,130
1.32%, 02/04/05^2,4		203,587		203,549


36		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
White Pine Finance LLC
1.04%, 08/26/04^2,4	$	407,174	$	407,143
1.06%, 04/20/04^2,4		407,174		407,174
1.06%, 07/06/04^2,4		488,608		488,592
1.06%, 11/15/04^2,4		488,608		488,608

				20,700,869
COMMERCIAL PAPER – 2.83%
Amsterdam Funding Corp.
1.03%, 03/03/04²		610,761		610,726
Corporate Asset Funding Corp.
1.03%, 03/16/04²		407,174		406,999
1.05%, 05/21/04²		423,461		422,465
CRC Funding LLC
1.03%, 03/26/04²		325,739		325,506
Delaware Funding Corp.
1.02%, 03/16/04²		823,354		823,004
1.03%, 03/05/04²		363,940		363,898
Edison Asset Securitization
1.03%, 03/03/04²		610,761		610,726
Eureka Securitization Inc.
1.04%, 04/14/04²		488,608		487,987
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		285,022		284,948
Galaxy Funding Inc.
1.05%, 05/17/04²		407,174		406,264
Gemini Securitization Corp.
1.04%, 04/19/04²		203,587		203,299
GIRO Funding US Corp.
1.05%, 05/19/04²		203,587		203,118
Jupiter Securitization Corp.
1.03%, 03/24/04²		407,174		406,906
Liberty Street Funding Corp.
1.03%, 03/10/04²		162,869		162,828
New Center Asset Trust
1.04%, 03/01/04²		203,587		203,587
Park Avenue Receivables Corp.
1.03%, 03/22/04²		334,575		334,374
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		814,347		814,018
1.04%, 05/20/04²		203,587		203,116
Receivables Capital Corp.
1.03%, 03/15/04²		887,639		887,283
Windmill Funding Corp.
1.03%, 03/05/04²		464,992		464,939

				8,625,991
TIME DEPOSITS – 2.21%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		814,347		814,347
1.33%, 02/10/05²		407,174		407,116
1.39%, 02/02/05²		407,174		407,117
1.40%, 10/25/04²		814,347		814,268
Bank of New York
1.39%, 11/01/04²		814,347		814,293
Bank of Novia Scotia
1.24%, 10/07/04²		610,761		610,724
1.42%, 10/29/04²		610,761		610,791
SunTrust Bank
1.01%, 03/01/04²		1,343,673		1,343,673
Toronto-Dominion Bank
1.34%, 02/10/05²		325,739		325,693
1.41%, 11/01/04²		610,761		610,720

				6,758,742

U.S. GOVERNMENT AGENCY NOTES – 0.65%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		610,760		609,356
1.28%, 08/19/04²		325,739		323,758
Federal National Mortgage Association
1.28%, 08/20/04²		1,058,651		1,052,177

				1,985,291

REPURCHASE AGREEMENTS – 0.27%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		814,347		814,347

				814,347


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI EMU INDEX FUND

February 29, 2004


*Security*	*Value*
TOTAL SHORT-TERM INVESTMENTS (Cost: $74,688,788)	$	74,688,788


TOTAL INVESTMENTS IN SECURITIES-124.37% (Cost $343,241,471)		379,812,694

Other Assets, Less Liabilities-(24.37%)		(74,415,766	)

NET ASSETS-100.00%	$	305,396,928

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


38		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI FRANCE INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*

COMMON STOCKS – 99.83%
Total SA	47,922	$	8,752,834
Aventis SA	52,822		4,042,890
BNP Paribas SA	63,182		3,991,904
AXA	110,012		2,526,030
Carrefour SA	44,800		2,424,167
France Telecom¹	83,860		2,310,026
Societe Generale Class A	25,676		2,279,429
L’Oreal SA	26,418		2,171,332
Vivendi Universal SA¹	71,400		2,044,869
Sanofi-Synthelabo SA	28,728		1,963,200
Groupe Danone	9,408		1,640,028
Alcatel SA Class A¹	95,606		1,546,652
LVMH Moet Hennessy
Louis Vuitton SA	19,208		1,467,755
Suez SA	62,958		1,397,886
L’Air Liquide SA	7,836		1,388,386
Credit Agricole SA	51,226		1,317,520
Compagnie de Saint-Gobain	24,164		1,268,504
STMicroelectronics NV	45,892		1,188,884
Lafarge SA	12,880		1,109,036
Schneider Electric SA	16,170		1,074,881
Renault SA	13,468		939,614
Accor SA	14,812		649,842
PSA Peugeot Citroen SA	13,034		648,600
Lagardere S.C.A	9,814		594,452
Veolia Environnement	19,152		572,302
Pinault-Printemps-Redoute SA	5,264		568,371
Bouygues SA	15,260		561,991
European Aeronautic Defence
and Space Co.	22,190		513,098
Compagnie Generale des
Etablissements Michelin Class B	10,640		512,944
Pernod Ricard SA	4,130		506,738
Arcelor	27,048		494,361
Vinci SA	5,222		474,297
Essilor International SA	7,672		439,923
Groupe Wanadoo SA¹	33,880		369,181
Cap Gemini SA¹	8,680		359,784
Thomson	18,018		341,855
Societe Television Francaise 1	9,394		323,316
Unibail Holding	3,192		320,259
Etablissements Economiques du
Casino Guichard-Perrachon SA	3,024		299,834
Publicis Groupe	7,896		272,936
Valeo SA	5,740		264,239
Sodexho Alliance SA	7,714		252,651
Thales SA	6,104		232,229
Technip-Coflexip SA	1,498		208,462
Euronext NV	7,238		197,221
ALSTOM¹	71,661		191,433
Atos Origin SA¹	2,702		188,677
Dassault Systemes SA	4,270		186,222
Autoroutes du Sud de la France	5,208		185,910
Business Objects SA¹	5,404		163,699
Sagem SA	1,426		159,728
Gecina SA	2,072		156,398
CNP Assurances	2,660		153,487
Hermes International	756		149,635
Imerys SA	616		134,937
Air France	6,398		131,326
Societe BIC SA	2,516		108,758
Klepierre	1,596		108,471
Zodiac SA	3,360		104,495


TOTAL COMMON STOCKS (Cost: $56,737,651)			58,947,889

SHORT-TERM INVESTMENTS – 4.10%

MONEY MARKET FUNDS – 2.03%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	835,570		835,570
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	281,834		281,834
BlackRock Temp Cash Money Market Fund²	13,066		13,066
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²	65,899		65,899

			1,196,369


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI FRANCE INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
FLOATING RATE NOTES – 1.10%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	12,811	$	12,810
1.05%, 09/15/04^2,4		25,621		25,620
1.05%, 10/12/04^2,4		12,811		12,810
1.14%, 08/23/04^2,4		12,811		12,816
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		19,216		19,214
1.38%, 11/22/04²		6,405		6,406
1.40%, 10/29/04²		25,621		25,621
CC USA Inc.
1.05%, 04/19/04^2,4		11,273		11,273
1.06%, 05/24/04^2,4		25,621		25,621
1.09%, 07/15/04^2,4		12,811		12,812
1.51%, 02/15/05^2,4		16,654		16,679
Dorada Finance Inc.
1.05%, 05/20/04^2,4		25,621		25,620
1.24%, 08/09/04²		6,405		6,405
1.48%, 01/18/05^2,4		19,216		19,215
Five Finance Inc.
1.06%, 04/15/04^2,4		12,811		12,811
HBOS Treasury Services PLC
1.16%, 01/24/05²		25,621		25,621
Holmes Financing PLC
1.05%, 04/15/04²		2,562		2,562
K2 USA LLC
1.05%, 08/16/04^2,4		6,405		6,405
1.05%, 09/27/04^2,4		27,671		27,669
1.06%, 05/17/04²		12,811		12,810
1.07%, 04/13/04²		12,811		12,811
1.46%, 01/12/05^2,4		12,811		12,810
Links Finance LLC
1.05%, 06/28/04²		12,811		12,810
1.06%, 07/20/04²		10,248		10,248
1.07%, 03/29/04²		12,811		12,811
1.07%, 05/04/04²		12,811		12,811
Nationwide Building Society
1.09%, 07/23/04^2,4		19,216		19,216
1.17%, 12/28/04^2,4		25,621		25,621
Northern Rock PLC
1.11%, 01/13/05^2,4		24,340		24,340
Permanent Financing PLC
1.06%, 12/10/04²		12,811		12,811
Sigma Finance Inc.
1.06%, 07/01/04²		12,811		12,810
1.06%, 07/20/04²		12,811		12,810
1.09%, 10/07/04²		25,621		25,618
1.24%, 08/06/04²		6,405		6,405
Tango Finance Corp.
1.05%, 01/18/05^2,4		11,273		11,272
1.06%, 07/15/04^2,4		7,686		7,685
1.07%, 02/25/05^2,4		14,348		14,345
1.10%, 07/06/04^2,4		7,686		7,686
WhistleJacket Capital LLC

1.05%, 09/15/04^2,4		12,811		12,809
1.32%, 02/04/05^2,4		6,405		6,404
White Pine Finance LLC
1.04%, 08/26/04^2,4		12,811		12,810
1.06%, 04/20/04^2,4		12,811		12,811
1.06%, 07/06/04^2,4		15,373		15,372
1.06%, 11/15/04^2,4		15,373		15,373

				651,299

COMMERCIAL PAPER – 0.46%
Amsterdam Funding Corp.
1.03%, 03/03/04²		19,216		19,215
Corporate Asset Funding Corp.
1.03%, 03/16/04²		12,811		12,805
1.05%, 05/21/04²		13,323		13,292
CRC Funding LLC
1.03%, 03/26/04²		10,248		10,241
Delaware Funding Corp.
1.02%, 03/16/04²		25,905		25,894
1.03%, 03/05/04²		11,450		11,449
Edison Asset Securitization
1.03%, 03/03/04²		19,216		19,215
Eureka Securitization Inc.
1.04%, 04/14/04²		15,373		15,353
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		8,967		8,965


40		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI AUSTRIA INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Galaxy Funding Inc.
1.05%, 05/17/04²	$	12,811	$	12,782
Gemini Securitization Corp.
1.04%, 04/19/04²		6,405		6,396
GIRO Funding US Corp.
1.05%, 05/19/04²		6,405		6,391
Jupiter Securitization Corp.
1.03%, 03/24/04²		12,811		12,802
Liberty Street Funding Corp.
1.03%, 03/10/04²		5,124		5,123
New Center Asset Trust
1.04%, 03/01/04²		6,405		6,406
Park Avenue Receivables Corp.
1.03%, 03/22/04²		10,526		10,520
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		25,621		25,611
1.04%, 05/20/04²		6,405		6,391
Receivables Capital Corp.
1.03%, 03/15/04²		27,927		27,916
Windmill Funding Corp.
1.03%, 03/05/04²		14,630		14,628

				271,395
TIME DEPOSITS – 0.36%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		25,621		25,621
1.33%, 02/10/05²		12,811		12,809
1.39%, 02/02/05²		12,811		12,809
1.40%, 10/25/04²		25,621		25,619
Bank of New York
1.39%, 11/01/04²		25,621		25,620
Bank of Novia Scotia
1.24%, 10/07/04²		19,216		19,215
1.42%, 10/29/04²		19,216		19,217
SunTrust Bank
1.01%, 03/01/04²		42,275		42,275
Toronto-Dominion Bank
1.34%, 02/10/05²		10,248		10,247
1.41%, 11/01/04²		19,216		19,215

				212,647
U.S. GOVERNMENT AGENCY NOTES – 0.11%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²	$	19,216	$	19,172
1.28%, 08/19/04²		10,248		10,186
Federal National Mortgage Association
1.28%, 08/20/04²		33,308		33,104

				62,462
REPURCHASE AGREEMENTS – 0.04%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		25,621		25,621

				25,621

TOTAL SHORT-TERM INVESTMENTS (Cost: $2,419,793)				2,419,793

TOTAL INVESTMENTS IN SECURITIES – 103.93% (Cost $59,157,444)				61,367,682
Other Assets, Less Liabilities – (3.93%)				(2,320,103	)

NET ASSETS – 100.00%			$	59,047,579

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Unaudited)

iSHARES MSCI GERMANY INDEX FUND

February 29, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 95.75%
Siemens AG		213,330	$	16,447,130
Deutsche Telekom AG¹		688,950		13,465,201
Deutsche Bank AG		137,880		11,820,797
E.ON AG		158,550		10,716,712
DaimlerChrysler AG		219,930		9,878,458
SAP AG		54,600		8,615,744
BASF AG		136,950		7,282,864
Allianz AG		54,660		6,809,163
RWE AG		122,580		5,412,943
Bayer AG		190,290		5,390,725
Muenchener Rueckversicherungs-Gesellschaft AG		43,484		5,070,609
Deutsche Post AG		138,720		3,295,516
Volkswagen AG		63,150		2,965,934
Commerzbank AG		151,230		2,936,928
Schering AG		50,850		2,517,136
Infineon Technologies AG¹		170,130		2,411,920

Bayerische Hypo-undVereinsbank AG¹		106,350		2,333,590
METRO AG		45,450		2,033,543
Deutsche Boerse AG		34,470		1,982,553
ThyssenKrupp AG		91,950		1,781,124
Continental AG		40,950		1,677,526
adidas-Salomon AG		12,840		1,443,810
Linde AG		26,400		1,387,197
ALTANA AG		21,060		1,289,774
MAN AG		33,060		1,157,140
Hypo Real Estate Holding AG¹		38,414		1,097,776
Deutsche Lufthansa AG		60,270		1,078,351
Puma AG		4,890		1,002,025
TUI AG		36,330		835,993
Fresenius Medical Care AG		10,500		703,715
Beiersdorf AG		5,983		657,155
Merck KGaA		14,130		623,257
HeidelbergerCement AG¹		13,390		598,935
Celesio AG		10,770		564,709
QIAGEN NV¹		37,950		516,324
MLP AG¹		19,770		454,438
Suedzucker AG		18,540		357,518
EPCOS AG¹		14,700		350,501

*Security*	Shares Or Principal		*Value*
KarstadtQuelle AG		13,260	$	332,641
Douglas Holding AG		9,720		301,082

TOTAL COMMON STOCKS (Cost: $155,096,573)				139,598,457
PREFERRED STOCKS – 4.22%
Henkel KGaA		20,370		1,720,808
Porsche AG		2,280		1,326,817
Volkswagen AG		30,660		979,424
RWE AG		22,470		855,996
ProSiebenSat.1 Media AG		21,450		453,077
Wella AG		4,800		439,904
Fresenius Medical Care AG		8,220		372,685

TOTAL PREFERRED STOCKS (Cost: $4,658,083)				6,148,711
SHORT-TERM INVESTMENTS – 29.49%
MONEY MARKET FUNDS – 14.15%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		14,031,682		14,031,682
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		5,153,641		5,153,641
BlackRock Temp Cash Money Market Fund²		238,920		238,920
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²		1,205,043		1,205,043

				20,629,286
FLOATING RATE NOTES – 8.17%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	234,256		234,249
1.05%, 09/15/04^2,4		468,513		468,487
1.05%, 10/12/04^2,4		234,256		234,242
1.14%, 08/23/04^2,4		234,256		234,353
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		351,385		351,353
1.38%, 11/22/04²		117,128		117,135


42		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI GERMANY INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
1.40%, 10/29/04²	$	468,513	$	468,505
CC USA Inc.
1.05%, 04/19/04^2,4		206,146		206,144
1.06%, 05/24/04^2,4		468,513		468,502
1.09%, 07/15/04^2,4		234,256		234,288
1.51%, 02/15/05^2,4		304,533		305,000
Dorada Finance Inc.
1.05%, 05/20/04^2,4		468,513		468,497
1.24%, 08/09/04²		117,128		117,120
1.48%, 01/18/05^2,4		351,385		351,369
Five Finance Inc.
1.06%, 04/15/04^2,4		234,256		234,256
HBOS Treasury Services PLC
1.16%, 01/24/05²		468,513		468,513
Holmes Financing PLC
1.05%, 04/15/04²		46,851		46,851
K2 USA LLC
1.05%, 08/16/04^2,4		117,128		117,120
1.05%, 09/27/04^2,4		505,994		505,950
1.06%, 05/17/04²		234,256		234,254
1.07%, 04/13/04²		234,256		234,255
1.46%, 01/12/05^2,4		234,256		234,236
Links Finance LLC
1.05%, 06/28/04²		234,256		234,241
1.06%, 07/20/04²		187,405		187,391
1.07%, 03/29/04²		234,256		234,256
1.07%, 05/04/04²		234,256		234,254
Nationwide Building Society
1.09%, 07/23/04^2,4		351,385		351,385
1.17%, 12/28/04^2,4		468,513		468,513
Northern Rock PLC
1.11%, 01/13/05^2,4		445,087		445,087
Permanent Financing PLC
1.06%, 12/10/04²		234,256		234,256
Sigma Finance Inc.
1.06%, 07/01/04²		234,256		234,237
1.06%, 07/20/04²		234,256		234,238
1.09%, 10/07/04²		468,513		468,457
1.24%, 08/06/04²		117,128		117,123
Tango Finance Corp.
1.05%, 01/18/05^2,4		206,146		206,127
1.06%, 07/15/04^2,4		140,554		140,537
1.07%, 02/25/05^2,4		262,367		262,315
1.10%, 07/06/04^2,4		140,554		140,549
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		234,256		234,231
1.32%, 02/04/05^2,4		117,128		117,106
White Pine Finance LLC
1.04%, 08/26/04^2,4		234,256		234,239
1.06%, 04/20/04^2,4		234,256		234,256
1.06%, 07/06/04^2,4		281,108		281,098
1.06%, 11/15/04^2,4		281,108		281,108

				11,909,683
COMMERCIAL PAPER – 3.40%
Amsterdam Funding Corp.
1.03%, 03/03/04²		351,385		351,365
Corporate Asset Funding Corp.
1.03%, 03/16/04²		234,256		234,156
1.05%, 05/21/04²		243,627		243,054
CRC Funding LLC
1.03%, 03/26/04²		187,405		187,271
Delaware Funding Corp.
1.02%, 03/16/04²		473,695		473,493
1.03%, 03/05/04²		209,383		209,359
Edison Asset Securitization
1.03%, 03/03/04²		351,385		351,365
Eureka Securitization Inc.
1.04%, 04/14/04²		281,108		280,750
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		163,979		163,937
Galaxy Funding Inc.
1.05%, 05/17/04²		234,256		233,733
Gemini Securitization Corp.
1.04%, 04/19/04²		117,128		116,962
GIRO Funding US Corp.
1.05%, 05/19/04²		117,128		116,858
Jupiter Securitization Corp.
1.03%, 03/24/04²		234,256		234,102
Liberty Street Funding Corp.
1.03%, 03/10/04²		93,703		93,678
New Center Asset Trust
1.04%, 03/01/04²		117,128		117,128


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI GERMANY INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Park Avenue Receivables Corp.
1.03%, 03/22/04²	$	192,488	$	192,373
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		468,513		468,323
1.04%, 05/20/04²		117,128		116,858
Receivables Capital Corp.
1.03%, 03/15/04²		510,679		510,474
Windmill Funding Corp.
1.03%, 03/05/04²		267,521		267,490

				4,962,729
TIME DEPOSITS – 2.67%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		468,513		468,513
1.33%, 02/10/05²		234,256		234,223
1.39%, 02/02/05²		234,256		234,224
1.40%, 10/25/04²		468,513		468,473
Bank of New York
1.39%, 11/01/04²		468,513		468,481
Bank of Novia Scotia
1.24%, 10/07/04²		351,385		351,363
1.42%, 10/29/04²		351,385		351,402
SunTrust Bank
1.01%, 03/01/04²		773,046		773,046
Toronto-Dominion Bank
1.34%, 02/10/05²		187,405		187,378
1.41%, 11/01/04²		351,385		351,361

				3,888,464
U.S. GOVERNMENT AGENCY NOTES – 0.78%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		351,385		350,576
1.28%, 08/19/04²		187,405		186,266
Federal National Mortgage Association
1.28%, 08/20/04²		609,066		605,342

				1,142,184
REPURCHASE AGREEMENTS – 0.32%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		468,513		468,513

				468,513

TOTAL SHORT TERM INSTRUMENTS (Cost: $43,000,859)				43,000,859

TOTAL INVESTMENTS IN SECURITIES – 129.46% (Cost $202,755,515)				188,748,027
Other Assets, Less Liabilities – (29.46%)				(42,947,640	)

NET ASSETS – 100.00%			$	145,800,387

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


44		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI ITALY INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 95.25%
ENI SpA	250,632	$	4,910,940
Telecom Italia SpA¹	777,115		2,442,880
Assicurazioni Generali SpA	90,090		2,434,626
Telecom Italia Mobile SpA	361,053		2,041,168
UniCredito Italiano SpA	252,351		1,329,436
Enel SpA	171,369		1,324,400
Sanpaolo IMI SpA	100,773		1,295,928
Banca Intesa SpA	347,167		1,289,751
Mediaset SpA	57,600		662,004
Riunione Adriatica di Sicurta SpA	34,632		629,102
Banca Popolare di Verona e Novaro Scrl	35,946		620,814
Mediobanca SpA	50,418		610,783
Alleanza Assicurazioni SpA	49,410		580,154
Banche Popolari Unite Scrl¹	30,933		549,225
Snam Rete Gas SpA	110,943		512,790
Finmeccanica SpA	513,855		437,987
Banca Nazionale del Lavoro SpA¹	157,203		410,182
Banca Antonveneta Spa Foreign	20,772		409,334
Banca Monte dei Paschi di Siena SpA	120,879		394,254
Capitalia SpA¹	124,902		368,578
Banca Popolare di Milano Scrl	51,021		329,013
Seat Pagine Gialle SpA¹	300,307		301,490
Autostrade SpA¹	16,155		294,866
Fiat SpA¹	36,821		284,108
Luxottica Group SpA	14,976		254,925
Mediolanum SpA	27,855		202,121
Banca Fideuram SpA	31,653		197,824
Autogrill SpA¹	12,357		173,342
Pirelli SpA	168,672		172,899
Italcementi SpA	11,997		146,380
Arnoldo Mondadori Editore SpA	11,097		110,580
Bulgari SpA	12,456		109,884
Tiscali SpA¹	15,228		105,389
Fineco SpA¹	163,287		105,297
Gruppo Editoriale L’Espresso SpA	14,310		88,545
Benetton Group SpA	6,282		70,639
Telecom Italia Media SpA¹	107,278		51,718


*Security*	Shares or Principal		*Value*
Sorin SpA¹		13,298	$	38,582


TOTAL COMMON STOCKS (Cost: $25,179,233)				26,291,938
PREFERRED STOCKS – 4.54%
Telecom Italia SpA RNC¹		565,291		1,253,738

TOTAL PREFERRED STOCKS (Cost: $821,280)				1,253,738
SHORT-TERM INVESTMENTS – 30.09%
MONEY MARKET FUNDS – 14.36%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		2,683,472		2,683,472
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		999,976		999,976
BlackRock Temp Cash Money Market Fund²		46,358		46,358
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²		233,818		233,818

				3,963,624
FLOATING RATE NOTES – 8.37%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	45,453		45,452
1.05%, 09/15/04^2,4		90,907		90,902
1.05%, 10/12/04^2,4		45,453		45,451
1.14%, 08/23/04^2,4		45,453		45,472
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		68,180		68,174
1.38%, 11/22/04²		22,727		22,728
1.40%, 10/29/04²		90,907		90,905
CC USA Inc.
1.05%, 04/19/04^2,4		39,999		39,999
1.06%, 05/24/04^2,4		90,907		90,905
1.09%, 07/15/04^2,4		45,453		45,460
1.51%, 02/15/05^2,4		59,089		59,180
Dorada Finance Inc.
1.05%, 05/20/04^2,4		90,907		90,904


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI ITALY INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
1.24%, 08/09/04²	$	22,727	$	22,726
1.48%, 01/18/05^2,4		68,180		68,177
Five Finance Inc.
1.06%, 04/15/04^2,4		45,453		45,453
HBOS Treasury Services PLC
1.16%, 01/24/05²		90,907		90,907
Holmes Financing PLC
1.05%, 04/15/04²		9,091		9,091
K2 USA LLC
1.05%, 08/16/04^2,4		22,727		22,725
1.05%, 09/27/04^2,4		98,179		98,171
1.06%, 05/17/04²		45,453		45,453
1.07%, 04/13/04²		45,453		45,453
1.46%, 01/12/05^2,4		45,453		45,449
Links Finance LLC
1.05%, 06/28/04²		45,453		45,450
1.06%, 07/20/04²		36,363		36,360
1.07%, 03/29/04²		45,453		45,453
1.07%, 05/04/04²		45,453		45,453
Nationwide Building Society
1.09%, 07/23/04^2,4		68,180		68,180
1.17%, 12/28/04^2,4		90,907		90,907
Northern Rock PLC
1.11%, 01/13/05^2,4		86,362		86,362
Permanent Financing PLC
1.06%, 12/10/04²		45,453		45,453
Sigma Finance Inc.
1.06%, 07/01/04²		45,453		45,450
1.06%, 07/20/04²		45,453		45,450
1.09%, 10/07/04²		90,907		90,896
1.24%, 08/06/04²		22,727		22,726
Tango Finance Corp.
1.05%, 01/18/05^2,4		39,999		39,995
1.06%, 07/15/04^2,4		27,272		27,269
1.07%, 02/25/05^2,4		50,908		50,898
1.10%, 07/06/04^2,4		27,272		27,271
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		45,453		45,449
1.32%, 02/04/05^2,4		22,727		22,722
White Pine Finance LLC
1.04%, 08/26/04^2,4		45,453		45,450
1.06%, 04/20/04^2,4		45,453		45,453
1.06%, 07/06/04^2,4		54,544		54,542
1.06%, 11/15/04^2,4		54,544		54,545

				2,310,871
COMMERCIAL PAPER – 3.49%
Amsterdam Funding Corp.
1.03%, 03/03/04²		68,180		68,176
Corporate Asset Funding Corp.
1.03%, 03/16/04²		45,453		45,434
1.05%, 05/21/04²		47,272		47,160
CRC Funding LLC
1.03%, 03/26/04²		36,363		36,337
Delaware Funding Corp.
1.02%, 03/16/04²		91,912		91,873
1.03%, 03/05/04²		40,627		40,623
Edison Asset Securitization
1.03%, 03/03/04²		68,180		68,176
Eureka Securitization Inc.
1.04%, 04/14/04²		54,544		54,475
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		31,817		31,810
Galaxy Funding Inc.
1.05%, 05/17/04²		45,453		45,352
Gemini Securitization Corp.
1.04%, 04/19/04²		22,727		22,695
GIRO Funding US Corp.
1.05%, 05/19/04²		22,727		22,674
Jupiter Securitization Corp.
1.03%, 03/24/04²		45,453		45,424
Liberty Street Funding Corp.
1.03%, 03/10/04²		18,181		18,177
New Center Asset Trust
1.04%, 03/01/04²		22,727		22,727
Park Avenue Receivables Corp.
1.03%, 03/22/04²		37,349		37,327
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		90,907		90,870
1.04%, 05/20/04²		22,727		22,674


46		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI ITALY INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Receivables Capital Corp.
1.03%, 03/15/04²	$	99,088	$	99,049
Windmill Funding Corp.
1.03%, 03/05/04²		51,908		51,902

				962,935
TIME DEPOSITS – 2.74%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		90,907		90,907
1.33%, 02/10/05²		45,453		45,447
1.39%, 02/02/05²		45,453		45,447
1.40%, 10/25/04²		90,907		90,898
Bank of New York
1.39%, 11/01/04²		90,907		90,901
Bank of Novia Scotia
1.24%, 10/07/04²		68,180		68,176
1.42%, 10/29/04²		68,180		68,184
SunTrust Bank
1.01%, 03/01/04²		149,996		149,996
Toronto-Dominion Bank
1.34%, 02/10/05²		36,363		36,358
1.41%, 11/01/04²		68,180		68,176

				754,490
U.S. GOVERNMENT AGENCY NOTES – 0.80%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		68,180		68,023
1.28%, 08/19/04²		36,363		36,142

Federal National Mortgage Association
1.28%, 08/20/04²		118,179		117,456

				221,621
REPURCHASE AGREEMENTS – 0.33%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²	$	90,907	$	90,907

				90,907

TOTAL SHORT-TERM INVESTMENTS (Cost: $8,304,448)				8,304,448

TOTAL INVESTMENTS IN SECURITIES – 129.88% (Cost $34,304,961)				35,850,124
Other Assets, Less Liabilities – (29.88%)				(8,247,653	)

NET ASSETS – 100.00%			$	27,602,471

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Unaudited)

iSHARES MSCI NETHERLANDS INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.95%
Royal Dutch Petroleum Co.	102,804	$	5,071,039
ING Groep NV	124,150		3,035,765
Unilever NV CVA	34,268		2,484,426
ABN AMRO Holding NV	44,486		1,027,541
AEGON NV	69,031		1,021,533
Akzo Nobel NV	26,520		1,021,155
Koninklijke Philips Electronics NV	32,266		980,213
Koninklijke KPN NV¹	113,854		898,294
Heineken NV	20,722		880,550
Reed Elsevier NV	63,856		875,925
TPG NV	36,608		799,179
ASML Holding NV¹	30,446		561,763
Koninklijke Ahold NV¹	62,478		519,337
VNU NV	14,456		470,953
Wolters Kluwer NV CVA	22,386		399,696
Koninklijke Numico NV CVA¹	11,596		382,101
Oce NV	17,888		344,500
Koninklijke Vendex KBB NV	16,458		282,197
IHC Caland NV	5,772		280,414
Vedior NV	12,220		191,918
DSM NV	1,768		83,718
Hagemeyer NV	29,822		70,773
Rodamco Europe NV	884		54,907

TOTAL COMMON STOCKS (Cost: $23,265,871)			21,737,897
SHORT-TERM INVESTMENTS – 1.84%
MONEY MARKET FUNDS – 0.89%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	133,106		133,106
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3	47,423		47,423
BlackRock Temp Cash Money Market Fund²	2,199		2,199


*Security*	Shares or Principal		*Value*
Short-Term Investment Co.– Prime Money Market Portfolio, Institutional Shares²		11,089	$	11,089

				193,817
FLOATING RATE NOTES – 0.50%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	2,156		2,156
1.05%, 09/15/04^2,4		4,311		4,311
1.05%, 10/12/04^2,4		2,156		2,155
1.14%, 08/23/04^2,4		2,156		2,156
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		3,233		3,234
1.38%, 11/22/04²		1,078		1,078
1.40%, 10/29/04²		4,311		4,311
CC USA Inc.
1.05%, 04/19/04^2,4		1,897		1,897
1.06%, 05/24/04^2,4		4,311		4,311
1.09%, 07/15/04^2,4		2,156		2,156
1.51%, 02/15/05^2,4		2,802		2,807
Dorada Finance Inc.
1.05%, 05/20/04^2,4		4,311		4,311
1.24%, 08/09/04²		1,078		1,078
1.48%, 01/18/05^2,4		3,233		3,233
Five Finance Inc.
1.06%, 04/15/04^2,4		2,156		2,156
HBOS Treasury Services PLC
1.16%, 01/24/05²		4,311		4,311
Holmes Financing PLC
1.05%, 04/15/04²		431		431
K2 USA LLC
1.05%, 08/16/04^2,4		1,078		1,078
1.05%, 09/27/04^2,4		4,656		4,656
1.06%, 05/17/04²		2,156		2,156
1.07%, 04/13/04²		2,156		2,156
1.46%, 01/12/05^2,4		2,156		2,155
Links Finance LLC
1.05%, 06/28/04²		2,156		2,155
1.06%, 07/20/04²		1,724		1,724
1.07%, 03/29/04²		2,156		2,156
1.07%, 05/04/04²		2,156		2,156


48		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI NETHERLANDS INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Nationwide Building Society
1.09%, 07/23/04^2,4	$	3,233	$	3,233
1.17%, 12/28/04^2,4		4,311		4,311
Northern Rock PLC
1.11%, 01/13/05^2,4		4,096		4,096
Permanent Financing PLC
1.06%, 12/10/04²		2,156		2,156
Sigma Finance Inc.
1.06%, 07/01/04²		2,156		2,155
1.06%, 07/20/04²		2,156		2,155
1.09%, 10/07/04²		4,311		4,311
1.24%, 08/06/04²		1,078		1,078
Tango Finance Corp.
1.05%, 01/18/05^2,4		1,897		1,897
1.06%, 07/15/04^2,4		1,293		1,293
1.07%, 02/25/05^2,4		2,414		2,414
1.10%, 07/06/04^2,4		1,293		1,293
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		2,156		2,155
1.32%, 02/04/05^2,4		1,078		1,078
White Pine Finance LLC
1.04%, 08/26/04^2,4		2,156		2,155
1.06%, 04/20/04^2,4		2,156		2,156
1.06%, 07/06/04^2,4		2,587		2,587
1.06%, 11/15/04^2,4		2,587		2,587

				109,594
COMMERCIAL PAPER – 0.21%
Amsterdam Funding Corp.
1.03%, 03/03/04²		3,233		3,233
Corporate Asset Funding Corp.
1.03%, 03/16/04²		2,156		2,155
1.05%, 05/21/04²		2,242		2,237
CRC Funding LLC
1.03%, 03/26/04²		1,724		1,723
Delaware Funding Corp.
1.02%, 03/16/04²		4,359		4,357
1.03%, 03/05/04²		1,927		1,926
Edison Asset Securitization
1.03%, 03/03/04²		3,233		3,233
Eureka Securitization Inc.
1.04%, 04/14/04²		2,587		2,583
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		1,509		1,509
Galaxy Funding Inc.
1.05%, 05/17/04²		2,156		2,151
Gemini Securitization Corp.
1.04%, 04/19/04²		1,078		1,076
GIRO Funding US Corp.
1.05%, 05/19/04²		1,078		1,075
Jupiter Securitization Corp.
1.03%, 03/24/04²		2,156		2,154
Liberty Street Funding Corp.
1.03%, 03/10/04²		862		862
New Center Asset Trust
1.04%, 03/01/04²		1,078		1,078
Park Avenue Receivables Corp.
1.03%, 03/22/04²		1,771		1,770
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		4,311		4,309
1.04%, 05/20/04²		1,078		1,076
Receivables Capital Corp.
1.03%, 03/15/04²		4,699		4,697
Windmill Funding Corp.
1.03%, 03/05/04²		2,462		2,461

				45,665
TIME DEPOSITS – 0.17%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		4,311		4,311
1.33%, 02/10/05²		2,156		2,155
1.39%, 02/02/05²		2,156		2,155
1.40%, 10/25/04²		4,311		4,311
Bank of New York
1.39%, 11/01/04²		4,311		4,311
Bank of Novia Scotia
1.24%, 10/07/04²		3,233		3,234
1.42%, 10/29/04²		3,233		3,234
SunTrust Bank
1.01%, 03/01/04²		7,113		7,113


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI NETHERLANDS INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Toronto-Dominion Bank
1.34%, 02/10/05²	$	1,724	$	1,724
1.41%, 11/01/04²		3,233		3,233

				35,781
U.S. GOVERNMENT AGENCY NOTES – 0.05%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		3,233		3,226
1.28%, 08/19/04²		1,724		1,714
Federal National Mortgage Association
1.28%, 08/20/04²		5,602		5,568

				10,508
REPURCHASE AGREEMENTS – 0.02%
Merrill Lynch Government Securities Inc. 1.06%, 03/01/04²		4,311		4,311

				4,311

TOTAL SHORT-TERM INVESTMENTS (Cost: $399,676)				399,676

TOTAL INVESTMENTS IN SECURITIES – 101.79% (Cost $23,665,547)				22,137,573
Other Assets, Less Liabilities – (1.79%)				(389,925	)

NET ASSETS – 100.00%			$	21,747,648

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See Notes To Financial Statements.


50		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI SPAIN INDEX FUND

February 29, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 99.94%
Telefonica SA		767,165	$	12,458,357
Banco Santander Central Hispano SA		665,376		7,705,121
Banco Bilbao Vizcaya Argentaria SA		400,944		5,529,719
Iberdrola SA		126,144		2,601,783
Repsol YPF SA		125,184		2,566,428
Endesa SA		129,960		2,543,236
Banco Popular Espanol SA		39,600		2,403,567
Altadis SA		54,120		1,741,622
Union Fenosa SA		61,344		1,259,153
Gas Natural SDG SA		46,272		1,152,734
Actividades de Construccion y
Servicios SA		21,643		1,095,019
Industria de Diseno Textil SA		47,352		1,035,494
Bankinter SA		22,752		938,260
Abertis Infraestructuras SA		49,673		794,320
FAES FARMA SA		43,096		749,655
Sociedad General de Aguas de
Barcelona SA		45,144		742,089
Promotora de Infomaciones SA		34,392		630,298
Fomento de Construcciones y
Contratas SA		16,392		600,421
NH Hoteles SA¹		47,928		560,966
Acerinox SA		12,216		560,082
Corporacion Mapfre SA		34,656		508,970
Uralita SA¹		42,048		457,141
Sacyr Vallehermoso SA		26,664		456,200
Telefonica Publicidad e Informacion SA		50,112		391,019
Grupo Ferrovial SA		10,368		378,223
Indra Sistemas SA		27,144		370,653
Viscofan SA		36,528		367,627
Acciona SA		5,616		362,850
Amadeus Global Travel Distribution SA
Class A		57,072		339,668
Iberia Lineas Aereas de Espana SA		85,992		299,166
Ebro Puleva SA		25,039		295,554
Zeltia SA		41,424		276,905
Grupo Empresarial ENCE SA		9,600		258,838
Antena 3 Television SA¹		2,781		123,841

TOTAL COMMON STOCKS (Cost: $39,189,952)				52,554,979

*Security*	*Shares or* *Principal*		*Value*
SHORT-TERM INVESTMENTS – 26.60%
MONEY MARKET FUNDS – 12.70%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares²^,³		4,521,448	$	4,521,448
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares²^,3		1,683,608		1,683,608
BlackRock Temp Cash Money Market Fund²		78,051		78,051
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares²		393,667		393,667

				6,676,774
FLOATING RATE NOTES – 7.40%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	76,528		76,525
1.05%, 09/15/04^2,4		153,055		153,047
1.05%, 10/12/04^2,4		76,528		76,523
1.14%, 08/23/04^2,4		76,528		76,559
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		114,791		114,781
1.38%, 11/22/04²		38,264		38,266
1.40%, 10/29/04²		153,055		153,053
CC USA Inc.
1.05%, 04/19/04^2,4		67,344		67,344
1.06%, 05/24/04^2,4		153,055		153,052
1.09%, 07/15/04^2,4		76,528		76,538
1.51%, 02/15/05^2,4		99,486		99,638
Dorada Finance Inc.
1.05%, 05/20/04^2,4		153,055		153,050
1.24%, 08/09/04²		38,264		38,261
1.48%, 01/18/05^2,4		114,791		114,786
Five Finance Inc.
1.06%, 04/15/04^2,4		76,528		76,528
HBOS Treasury Services PLC
1.16%, 01/24/05²		153,055		153,056
Holmes Financing PLC
1.05%, 04/15/04²		15,306		15,306


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SPAIN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
K2 USA LLC
1.05%, 08/16/04^2,4	$	38,264	$	38,261
1.05%, 09/27/04^2,4		165,300		165,286
1.06%, 05/17/04²		76,528		76,527
1.07%, 04/13/04²		76,528		76,527
1.46%, 01/12/05^2,4		76,528		76,521
Links Finance LLC
1.05%, 06/28/04²		76,528		76,523
1.06%, 07/20/04²		61,222		61,217
1.07%, 03/29/04²		76,528		76,528
1.07%, 05/04/04²		76,528		76,527
Nationwide Building Society
1.09%, 07/23/04^2,4		114,791		114,791
1.17%, 12/28/04^2,4		153,055		153,056
Northern Rock PLC
1.11%, 01/13/05^2,4		145,403		145,403
Permanent Financing PLC
1.06%, 12/10/04²		76,528		76,528
Sigma Finance Inc.
1.06%, 07/01/04²		76,528		76,521
1.06%, 07/20/04²		76,528		76,522
1.09%, 10/07/04²		153,055		153,037
1.24%, 08/06/04²		38,264		38,262
Tango Finance Corp.
1.05%, 01/18/05^2,4		67,344		67,339
1.06%, 07/15/04^2,4		45,917		45,911
1.07%, 02/25/05^2,4		85,711		85,694
1.10%, 07/06/04^2,4		45,917		45,915
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		76,528		76,519
1.32%, 02/04/05^2,4		38,264		38,257
White Pine Finance LLC
1.04%, 08/26/04^2,4		76,528		76,522
1.06%, 04/20/04^2,4		76,528		76,528
1.06%, 07/06/04^2,4		91,833		91,830
1.06%, 11/15/04^2,4		91,833		91,833

				3,890,698
COMMERCIAL PAPER – 3.08%
Amsterdam Funding Corp.
1.03%, 03/03/04²		114,791		114,785
Corporate Asset Funding Corp.
1.03%, 03/16/04²		76,528		76,495
1.05%, 05/21/04²		79,589		79,402
CRC Funding LLC
1.03%, 03/26/04²		61,222		61,178
Delaware Funding Corp.
1.02%, 03/16/04²		154,748		154,682
1.03%, 03/05/04²		68,402		68,394
Edison Asset Securitization
1.03%, 03/03/04²		114,791		114,785
Eureka Securitization Inc.
1.04%, 04/14/04²		91,833		91,716
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		53,569		53,556
Galaxy Funding Inc.
1.05%, 05/17/04²		76,528		76,357
Gemini Securitization Corp.
1.04%, 04/19/04²		38,264		38,210
GIRO Funding US Corp.
1.05%, 05/19/04²		38,264		38,176
Jupiter Securitization Corp.
1.03%, 03/24/04²		76,528		76,477
Liberty Street Funding Corp.
1.03%, 03/10/04²		30,611		30,603
New Center Asset Trust
1.04%, 03/01/04²		38,264		38,264
Park Avenue Receivables Corp.
1.03%, 03/22/04²		62,883		62,845
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		153,055		152,993
1.04%, 05/20/04²		38,264		38,175
Receivables Capital Corp.
1.03%, 03/15/04²		166,830		166,763
Windmill Funding Corp.
1.03%, 03/05/04²		87,395		87,385

				1,621,241


52		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SPAIN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
TIME DEPOSITS – 2.42%
Abbey National Treasury Services PLC
1.02%, 03/01/04²	$	153,055	$	153,056
1.33%, 02/10/05²		76,528		76,517
1.39%, 02/02/05²		76,528		76,517
1.40%, 10/25/04²		153,055		153,040
Bank of New York
1.39%, 11/01/04²		153,055		153,045
Bank of Novia Scotia
1.24%, 10/07/04²		114,791		114,785
1.42%, 10/29/04²		114,791		114,797
SunTrust Bank
1.01%, 03/01/04²		252,541		252,541
Toronto-Dominion Bank
1.34%, 02/10/05²		61,222		61,213
1.41%, 11/01/04²		114,791		114,784

				1,270,295
U.S. GOVERNMENT AGENCY NOTES – 0.71%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		114,791		114,527
1.28%, 08/19/04²		61,222		60,850
Federal National Mortgage Association
1.28%, 08/20/04²		198,972		197,755

				373,132
REPURCHASE AGREEMENTS – 0.29%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		153,055		153,056
				153,056

TOTAL SHORT-TERM INVESTMENTS (Cost: $13,985,196)				13,985,196

TOTAL INVESTMENTS IN SECURITIES – 126.54% (Cost $53,175,148)				66,540,175
Other Assets, Less Liabilities - (26.54%)				(13,955,222	)

NET ASSETS – 100.00%			$	52,584,953

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULE OF INVESTMENTS		53

Schedule of Investments (Unaudited)

iSHARES MSCI SWEDEN INDEX FUND

February 29, 2004


*Security*	*Shares*		*Value*
COMMON STOCKS – 99.98%
Telefonaktiebolaget LM Ericsson Class B¹		2,245,452	$	6,545,540
Nordea AB		357,786		2,475,213
Hennes & Mauritz AB Class B		72,512		1,938,407
Svenska Handelsbanken AB Class A		84,128		1,582,160
Svenska Cellulosa AB Class B		29,304		1,163,232
TeliaSonera AB		249,751		1,127,271
Sandvik AB		34,188		1,095,328
Skandinaviska Enskilda Banken AB Class A		73,282		1,087,781
Volvo AB Class B		30,910		971,621
Electrolux AB Series B		45,496		959,522
Tele2 AB Class B¹		14,476		698,112
Securitas AB Class B		45,232		692,680
Atlas Copco AB Class A		17,358		621,411
ASSA Abloy AB Class B		45,738		602,123
Skandia Forsakrings AB		124,476		550,128
SKF AB Class B		13,970		516,073
Swedish Match AB		52,646		502,118
Skanska AB Class B		59,180		488,913
Nobel Biocare Holding AG		3,168		406,416
Atlas Copco AB Class B		10,560		344,709
Volvo AB Class A		11,374		343,014
Holmen AB Class B		7,986		276,778
Getinge AB Class B		22,968		246,828
Drott AB Class B		12,958		239,344
Gambro AB Class A		27,368		231,614
Eniro AB		26,158		230,159
Trelleborg AB Class B		12,276		225,098
Svenskt Stal AB Series A		9,834		177,018
Modern Times Group AB Class B¹		7,700		174,290
Svenska Handelsbanken AB Class B		7,854		146,652
WM-Data AB Class B¹		51,832		139,951
Alfa Laval AB		10,054		135,058
OM AB		8,536		133,586
Billerud AB		8,272		127,788
Castellum AB		5,346		126,393
Gambro AB Class B		14,960		124,596
SAS AB¹		10,912		100,410
SKF AB Class A		2,684		99,331

*Security*	*Shares or* *Principal*		*Value*
Hoganas AB Class B		4,136	$	95,008
Svenskt Stal AB Series B		4,642		80,753
Axfood AB		2,860		72,612

TOTAL COMMON STOCKS (Cost: $22,717,301)				27,895,039

SHORT-TERM INVESTMENTS – 28.51%

MONEY MARKET FUNDS – 13.61%

Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3		2,570,845		2,570,845
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^2,3		957,829		957,829
BlackRock Temp Cash Money Market Fund²		44,404		44,404
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares²		223,963		223,963

				3,797,041
FLOATING RATE NOTES – 7.93%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	43,538		43,536
1.05%, 09/15/04^2,4		87,075		87,071
1.05%, 10/12/04^2,4		43,538		43,535
1.14%, 08/23/04^2,4		43,538		43,556
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		65,307		65,301
1.38%, 11/22/04²		21,769		21,770
1.40%, 10/29/04²		87,075		87,074
CC USA Inc.
1.05%, 04/19/04^2,4		38,313		38,313
1.06%, 05/24/04^2,4		87,075		87,073
1.09%, 07/15/04^2,4		43,538		43,544
1.51%, 02/15/05^2,4		56,599		56,686
Dorada Finance Inc.
1.05%, 05/20/04^2,4		87,075		87,072
1.24%, 08/09/04²		21,769		21,767
1.48%, 01/18/05^2,4		65,307		65,304


54		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SWEDEN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Five Finance Inc.
1.06%, 04/15/04^2,4	$	43,538	$	43,538
HBOS Treasury Services PLC
1.16%, 01/24/05²		87,075		87,075
Holmes Financing PLC
1.05%, 04/15/04²		8,708		8,708
K2 USA LLC
1.05%, 08/16/04^2,4		21,769		21,767
1.05%, 09/27/04^2,4		94,041		94,033
1.06%, 05/17/04²		43,538		43,537
1.07%, 04/13/04²		43,538		43,537
1.46%, 01/12/05^2,4		43,538		43,534
Links Finance LLC
1.05%, 06/28/04²		43,538		43,535
1.06%, 07/20/04²		34,830		34,827
1.07%, 03/29/04²		43,538		43,538
1.07%, 05/04/04²		43,538		43,537
Nationwide Building Society
1.09%, 07/23/04^2,4		65,307		65,307
1.17%, 12/28/04^2,4		87,075		87,075
Northern Rock PLC
1.11%, 01/13/05^2,4		82,722		82,722
Permanent Financing PLC
1.06%, 12/10/04²		43,538		43,538
Sigma Finance Inc.
1.06%, 07/01/04²		43,538		43,534
1.06%, 07/20/04²		43,538		43,534
1.09%, 10/07/04²		87,075		87,065
1.24%, 08/06/04²		21,769		21,768
Tango Finance Corp.
1.05%, 01/18/05^2,4		38,313		38,310
1.06%, 07/15/04^2,4		26,123		26,119
1.07%, 02/25/05^2,4		48,762		48,753
1.10%, 07/06/04^2,4		26,123		26,122
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		43,538		43,533
1.32%, 02/04/05^2,4		21,769		21,765
White Pine Finance LLC
1.04%, 08/26/04^2,4		43,538		43,534
1.06%, 04/20/04^2,4		43,538		43,538
1.06%, 07/06/04^2,4		52,245		52,243
1.06%, 11/15/04^2,4		52,245		52,245

				2,213,473
COMMERCIAL PAPER – 3.31%
Amsterdam Funding Corp.
1.03%, 03/03/04²		65,307		65,303
Corporate Asset Funding Corp.
1.03%, 03/16/04²		43,538		43,519
1.05%, 05/21/04²		45,279		45,173
CRC Funding LLC
1.03%, 03/26/04²		34,830		34,805
Delaware Funding Corp.
1.02%, 03/16/04²		88,038		88,001
1.03%, 03/05/04²		38,915		38,910
Edison Asset Securitization
1.03%, 03/03/04²		65,307		65,303
Eureka Securitization Inc.
1.04%, 04/14/04²		52,245		52,179
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		30,476		30,469
Galaxy Funding Inc.
1.05%, 05/17/04²		43,538		43,440
Gemini Securitization Corp.
1.04%, 04/19/04²		21,769		21,738
GIRO Funding US Corp.
1.05%, 05/19/04²		21,769		21,719
Jupiter Securitization Corp.
1.03%, 03/24/04²		43,538		43,509
Liberty Street Funding Corp.
1.03%, 03/10/04²		17,415		17,411
New Center Asset Trust
1.04%, 03/01/04²		21,769		21,769
Park Avenue Receivables Corp.
1.03%, 03/22/04²		35,775		35,753
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		87,075		87,040
1.04%, 05/20/04²		21,769		21,719
Receivables Capital Corp.
1.03%, 03/15/04²		94,912		94,874
Windmill Funding Corp.
1.03%, 03/05/04²		49,720		49,714

				922,348


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SWEDEN INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
TIME DEPOSITS – 2.59%
Abbey National Treasury Services PLC
1.02%, 03/01/04²	$	87,075	$	87,075
1.33%, 02/10/05²		43,538		43,531
1.39%, 02/02/05²		43,538		43,532
1.40%, 10/25/04²		87,075		87,067
Bank of New York
1.39%, 11/01/04²		87,075		87,070
Bank of Novia Scotia
1.24%, 10/07/04²		65,307		65,303
1.42%, 10/29/04²		65,307		65,310
SunTrust Bank
1.01%, 03/01/04²		143,674		143,674
Toronto-Dominion Bank
1.34%, 02/10/05²		34,830		34,825
1.41%, 11/01/04²		65,307		65,302

				722,689
U.S. GOVERNMENT AGENCY NOTES – 0.76%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		65,307		65,156
1.28%, 08/19/04²		34,830		34,618
Federal National Mortgage Association
1.28%, 08/20/04²		113,198		112,506

				212,280
REPURCHASE AGREEMENTS – 0.31%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		87,075		87,075

				87,075

TOTAL SHORT-TERM INVESTMENTS (Cost: $7,954,906)				7,954,906

TOTAL INVESTMENTS IN SECURITIES – 128.49% (Cost $30,672,207)				35,849,945
Other Assets, Less Liabilities – (28.49%)				(7,948,235	)

NET ASSETS – 100.00%			$	27,901,710

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See Notes To Financial Statements.


56		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES MSCI SWITZERLAND INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.55%
Novartis AG	185,622	$	8,177,277
Nestle SA Registered	21,240		5,602,457
UBS AG Registered	54,873		4,031,063
Roche Holding AG Genusschein	36,480		3,762,750
Zurich Financial Services AG¹	13,211		2,163,606
Credit Suisse Group	58,765		2,137,666
Swiss Reinsurance Co.	28,361		2,041,018
Holcim Ltd. Registered	32,280		1,673,665
Compagnie Financiere Richemont AG Class A	48,000		1,275,540
Synthes-Stratec Inc.	1,248		1,259,743
Swisscom AG Registered	3,768		1,253,478
Givaudan SA Registered	2,184		1,117,751
Ciba Specialty Chemicals AG Registered¹	14,285		1,025,780
Syngenta AG	13,728		951,735
Serono SA	1,392		928,329
ABB Ltd.¹	135,054		817,736
Schindler Holding AG Participation Certificates¹	2,952		813,511
Swatch Group (The) AG Class B	5,424		696,124
Julius Baer Holding AG	1,792		658,922
Swatch Group (The) AG Registered	24,312		624,047
Banque Cantonale Vaudoise¹	4,588		592,443
Societe Generale de Surveillance Holding SA	1,032		584,235
Lonza Group AG Registered	10,850		546,323
Adecco SA Registered	10,512		522,683
Schindler Holding AG Registered¹	1,536		474,085
Valora Holding AG Registered	1,752		455,916
Vontobel Holding AG Registered	14,400		359,419
Clariant AG Registered¹	14,448		217,280
Logitech International SA Registered¹	3,360		161,247
Sulzer AG Registered	480		120,940
Geberit AG Registered	192		97,659
Kudelski SA Bearer¹	1,992		64,855
Kuoni Reisen Holding AG Registered	24		8,768

TOTAL COMMON STOCKS (Cost: $39,641,642)			45,218,051


*Security*	Shares or Principal	*Value*
SHORT-TERM INVESTMENTS – 17.28%
MONEY MARKET FUNDS – 8.25%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^2,3	2,538,779	$	2,538,779
Barclays Global Investors Funds Prime Money Market FundInstitutional Shares^2,3	944,817		944,817
BlackRock Temp Cash Money Market Fund²	43,801		43,801
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares²	220,921		220,921

			3,748,318
FLOATING RATE NOTES – 4.81%
Beta Finance Inc.
1.05%, 05/20/04^2,4	42,946		42,945
1.05%, 09/15/04^2,4	85,892		85,888
1.05%, 10/12/04^2,4	42,946		42,944
1.14%, 08/23/04^2,4	42,946		42,964
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²	64,419		64,414
1.38%, 11/22/04²	21,473		21,474
1.40%, 10/29/04²	85,892		85,891
CC USA Inc.
1.05%, 04/19/04^2,4	37,793		37,792
1.06%, 05/24/04^2,4	85,892		85,891
1.09%, 07/15/04^2,4	42,946		42,952
1.51%, 02/15/05^2,4	55,830		55,916
Dorada Finance Inc.
1.05%, 05/20/04^2,4	85,892		85,890
1.24%, 08/09/04²	21,473		21,472
1.48%, 01/18/05^2,4	64,419		64,417
Five Finance Inc.
1.06%, 04/15/04^2,4	42,946		42,946
HBOS Treasury Services PLC
1.16%, 01/24/05²	85,892		85,892
Holmes Financing PLC
1.05%, 04/15/04²	8,589		8,589


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SWITZERLAND INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
K2 USA LLC
1.05%, 08/16/04^2,4	$	21,473	$	21,472
1.05%, 09/27/04^2,4		92,764		92,756
1.06%, 05/17/04²		42,946		42,946
1.07%, 04/13/04²		42,946		42,946
1.46%, 01/12/05^2,4		42,946		42,943
Links Finance LLC
1.05%, 06/28/04²		42,946		42,943
1.06%, 07/20/04²		34,357		34,354
1.07%, 03/29/04²		42,946		42,946
1.07%, 05/04/04²		42,946		42,946
Nationwide Building Society
1.09%, 07/23/04^2,4		64,419		64,419
1.17%, 12/28/04^2,4		85,892		85,892
Northern Rock PLC
1.11%, 01/13/05^2,4		81,598		81,598
Permanent Financing PLC
1.06%, 12/10/04²		42,946		42,946
Sigma Finance Inc.
1.06%, 07/01/04²		42,946		42,943
1.06%, 07/20/04²		42,946		42,943
1.09%, 10/07/04²		85,892		85,882
1.24%, 08/06/04²		21,473		21,472
Tango Finance Corp.
1.05%, 01/18/05^2,4		37,793		37,789
1.06%, 07/15/04^2,4		25,768		25,765
1.07%, 02/25/05^2,4		48,100		48,090
1.10%, 07/06/04^2,4		25,768		25,767
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		42,946		42,942
1.32%, 02/04/05^2,4		21,473		21,469
White Pine Finance LLC
1.04%, 08/26/04^2,4		42,946		42,943
1.06%, 04/20/04^2,4		42,946		42,946
1.06%, 07/06/04^2,4		51,535		51,534
1.06%, 11/15/04^2,4		51,535		51,535

				2,183,404
COMMERCIAL PAPER – 2.00%
Amsterdam Funding Corp.
1.03%, 03/03/04²		64,419		64,416
Corporate Asset Funding Corp.
1.03%, 03/16/04²		42,946		42,928
1.05%, 05/21/04²		44,664		44,559
CRC Funding LLC
1.03%, 03/26/04²		34,357		34,332
Delaware Funding Corp.
1.02%, 03/16/04²		86,842		86,806
1.03%, 03/05/04²		38,386		38,382
Edison Asset Securitization
1.03%, 03/03/04²		64,419		64,416
Eureka Securitization Inc.
1.04%, 04/14/04²		51,535		51,470
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		30,062		30,055
Galaxy Funding Inc.
1.05%, 05/17/04²		42,946		42,850
Gemini Securitization Corp.
1.04%, 04/19/04²		21,473		21,443
GIRO Funding US Corp.
1.05%, 05/19/04²		21,473		21,424
Jupiter Securitization Corp.
1.03%, 03/24/04²		42,946		42,918
Liberty Street Funding Corp.
1.03%, 03/10/04²		17,178		17,174
New Center Asset Trust
1.04%, 03/01/04²		21,473		21,473
Park Avenue Receivables Corp.
1.03%, 03/22/04²		35,289		35,268
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		85,892		85,858
1.04%, 05/20/04²		21,473		21,423
Receivables Capital Corp.
1.03%, 03/15/04²		93,623		93,585
Windmill Funding Corp.
1.03%, 03/05/04²		49,045		49,039

				909,819


58		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI SWITZERLAND INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
TIME DEPOSITS – 1.57%
Abbey National Treasury Services PLC
1.02%, 03/01/04²	$	85,892	$	85,892
1.33%, 02/10/05²		42,946		42,940
1.39%, 02/02/05²		42,946		42,940
1.40%, 10/25/04²		85,892		85,884
Bank of New York
1.39%, 11/01/04²		85,892		85,887
Bank of Novia Scotia
1.24%, 10/07/04²		64,419		64,415
1.42%, 10/29/04²		64,419		64,423
SunTrust Bank
1.01%, 03/01/04²		141,723		141,723
Toronto-Dominion Bank
1.34%, 02/10/05²		34,357		34,352
1.41%, 11/01/04²		64,419		64,415

				712,871
U.S. GOVERNMENT AGENCY NOTES – 0.46%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		64,419		64,271
1.28%, 08/19/04²		34,357		34,148
Federal National Mortgage Association
1.28%, 08/20/04²		111,660		110,977

				209,396
REPURCHASE AGREEMENTS – 0.19%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		85,892		85,892

				85,892

TOTAL SHORT-TERM INVESTMENTS (Cost: $7,849,700)				7,849,700

TOTAL INVESTMENTS IN SECURITIES – 116.83% (Cost $47,491,342)				53,067,751
Other Assets, Less Liabilities – (16.83%)				(7,643,252	)

NET ASSETS – 100.00%			$	45,424,499

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		59

Schedule of Investments (Unaudited)

iSHARES MSCI UNITED KINGDOM INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.75%
HSBC Holdings PLC	1,037,869	$	16,862,807
BP PLC	2,093,320		16,811,400
Vodafone Group PLC	6,461,031		16,097,087
GlaxoSmithKline PLC	562,742		11,707,013
Royal Bank of Scotland Group PLC	265,323		8,390,265
AstraZeneca PLC	160,834		7,617,101
Shell Transport & Trading Co. PLC	918,158		6,270,417
Barclays PLC³	617,317		5,541,922
HBOS PLC	365,210		4,951,013
Lloyds TSB Group PLC	527,165		4,380,396
Diageo PLC	290,752		4,019,853
Tesco PLC	724,048		3,459,997
Unilever PLC	263,612		2,751,813
Rio Tinto PLC	101,539		2,715,364
BT Group PLC	826,483		2,710,969
National Grid Transco PLC	290,382		2,322,620
British American Tobacco PLC	149,152		2,275,265
Aviva PLC	215,291		2,253,389
BHP Billiton PLC	232,797		2,134,202
BG Group PLC	332,701		1,957,242
Prudential PLC	189,095		1,727,416
Cadbury Schweppes PLC	194,051		1,598,932
Centrica PLC	400,905		1,595,879
British Sky Broadcasting Group PLC¹	118,590		1,586,772
Reckitt Benckiser PLC	56,581		1,476,342
Imperial Tobacco Group PLC	68,617		1,475,864
Compass Group PLC	205,792		1,399,696
GUS PLC	95,167		1,291,026
WPP Group PLC	110,920		1,239,189
Kingfisher PLC	222,194		1,234,981
Scottish Power PLC	174,522		1,187,013
Marks & Spencer Group PLC	213,053		1,158,474
Legal & General Group PLC	611,146		1,134,165
Reed Elsevier PLC	119,121		1,095,929
Scottish & Southern Energy PLC	80,653		1,024,531
Boots Group PLC	74,340		1,024,354
BAE Systems PLC	286,976		1,013,215
ITV PLC¹	390,478		1,003,639
Amersham PLC	67,732		999,291
BAA PLC	100,359		977,793
Reuters Group PLC	133,753		970,536
Land Securities Group PLC	43,616		891,987
Pearson PLC	75,166		864,857
Smith & Nephew PLC	86,966		828,342
Wolseley PLC	54,398		821,243
BOC Group PLC	46,610		804,872
SABMiller PLC	74,871		783,653
J Sainsbury PLC	140,715		781,458
Man Group PLC	26,432		756,390
Carnival PLC	15,562		724,021
3i Group PLC	57,112		688,395
InterContinental Hotels Group PLC	68,713		663,091
Next PLC	25,665		662,521
Smiths Group PLC	52,215		645,358
Hilton Group PLC	152,456		625,978
Rentokil Initial PLC	171,395		621,836
Scottish & Newcastle PLC	77,939		614,717
Rolls-Royce Group PLC	144,786		591,127
Safeway PLC	103,191		583,123
Cable & Wireless PLC¹	222,076		578,010
Hanson PLC	68,676		553,766
Dixons Group PLC	187,384		551,179
British Land Co. PLC	45,489		544,499
Royal & Sun Alliance Insurance Group PLC	276,002		528,851
AMVESCAP PLC	64,900		513,382
United Utilities PLC	53,808		504,277
Imperial Chemical Industries PLC	113,870		497,658
Severn Trent PLC	33,807		464,896
Rexam PLC	50,198		422,003
LogicaCMG PLC	73,871		419,495
Sage Group PLC	116,171		415,550
Friends Provident PLC	155,111		413,792
EMAP PLC	24,426		412,501
Exel PLC	28,615		408,899
Hays PLC	157,176		408,362
Whitebread PLC	28,733		394,055
Yell Group PLC	62,776		393,186
Enterprise Inns PLC	33,748		381,727
William Hill PLC	41,241		380,379
GKN PLC	71,508		363,942


60		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI UNITED KINGDOM INDEX FUND

February 29, 2004


*Security*	*Shares*	*Value*
Tomkins PLC	72,806	$	362,779
Johnson Matthey PLC	21,063		359,225
EMI Group PLC	76,346		358,458
Daily Mail & General Trust PLC Class A	28,202		356,155
Bunzl PLC	42,185		349,160
Provident Financial PLC	24,839		343,186
Liberty International PLC	24,839		337,885
RMC Group PLC	26,137		336,140
Capita Group PLC	65,785		333,899
Corus Group PLC¹	395,536		330,316
BPB PLC	47,200		325,849
United Business Media PLC	31,624		324,837
Signet Group PLC	171,100		322,290
Kelda Group PLC	38,704		320,348
Slough Estates PLC	38,586		319,013
Hammerson PLC	25,429		313,821
Rank Group PLC	53,277		310,704
Peninsular & Oriental Steam Navigation Co. (The)	72,216		307,572
British Airways PLC¹	51,507		302,054
Electrocomponents PLC	42,834		278,418
International Power PLC¹	106,436		277,521
Persimmon PLC	26,137		276,964
Associated British Ports Holdings PLC	30,031		265,003
Kesa Electricals PLC	50,789		256,372
Taylor Woodrow PLC	50,917		255,600
Wimpey (George) PLC	35,518		254,264
Cobham PLC	10,856		252,839
Brambles Industries PLC	63,720		247,737
Alliance Unichem PLC	24,308		242,245
BBA Group PLC	46,433		238,046
Misys PLC	55,755		234,877
IMI PLC	35,282		230,968
Canary Wharf Group PLC¹	43,955		226,769
Invensys PLC¹	532,968		225,016
Barratt Developments PLC	21,594		222,211
Cattles PLC	32,804		213,833
ARM Holdings PLC¹	94,577		212,374
Close Brothers Group PLC	12,980		211,495
Aegis Group PLC	103,781		207,523
Mitchells & Butlers PLC	45,365		199,947
FirstGroup PLC	41,477		198,590
Celltech Group PLC¹	25,783		193,785
Tate & Lyle PLC	35,695		191,442
Pilkington PLC	101,421		183,041
United Utilities PLC Class A	32,066		181,351
Balfour Beatty PLC	38,881		178,224
MFI Furniture Group PLC	59,000		161,775
Schroders PLC	12,626		158,864
AMEC PLC	29,323		153,458
Stagecoach Group PLC	96,347		150,640
Serco Group PLC	38,586		150,377
Berkeley Group (The) PLC	8,909		149,957
Kidde PLC	80,299		141,940
Davis Service Group PLC	19,352		141,499
Securicor PLC	56,671		135,143
FKI PLC	59,059		130,426
De La Rue PLC	19,470		112,372
Novar PLC	42,539		106,969
SSL International PLC	17,051		99,676
Great Portland Estates PLC	18,231		84,244
Aggreko PLC	14,809		42,323

TOTAL COMMON STOCKS (Cost: $181,870,414)			188,338,359
SHORT-TERM INVESTMENTS – 0.42%
MONEY MARKET FUNDS – 0.21%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares^(2),(3)	271,618		271,618
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares^(2),(3)	92,438		92,438
BlackRock Temp Cash Money Market Fund⁽²⁾	4,285		4,285
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares⁽²⁾	21,614		21,614

			389,955


SCHEDULES OF INVESTMENTS		61

Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI UNITED KINGDOM INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
FLOATING RATE NOTES – 0.11%
Beta Finance Inc.
1.05%, 05/20/04^2,4	$	4,202	$	4,202
1.05%, 09/15/04^2,4		8,403		8,403
1.05%, 10/12/04^2,4		4,202		4,201
1.14%, 08/23/04^2,4		4,202		4,203
Canadian Imperial Bank of Commerce
1.24%, 10/07/04²		6,303		6,302
1.38%, 11/22/04²		2,101		2,101
1.40%, 10/29/04²		8,403		8,403
CC USA Inc.
1.05%, 04/19/04^2,4		3,698		3,697
1.06%, 05/24/04^2,4		8,403		8,403
1.09%, 07/15/04^2,4		4,202		4,202
1.51%, 02/15/05^2,4		5,462		5,471
Dorada Finance Inc.
1.05%, 05/20/04^2,4		8,403		8,403
1.24%, 08/09/04²		2,101		2,101
1.48%, 01/18/05^2,4		6,303		6,302
Five Finance Inc.
1.06%, 04/15/04^2,4		4,202		4,202
HBOS Treasury Services PLC
1.16%, 01/24/05²		8,403		8,403
Holmes Financing PLC
1.05%, 04/15/04²		840		840
K2 USA LLC
1.05%, 08/16/04^2,4		2,101		2,101
1.05%, 09/27/04^2,4		9,076		9,075
1.06%, 05/17/04²		4,202		4,202
1.07%, 04/13/04²		4,202		4,202
1.46%, 01/12/05^2,4		4,202		4,201
Links Finance LLC
1.05%, 06/28/04²		4,202		4,201
1.06%, 07/20/04²		3,361		3,361
1.07%, 03/29/04²		4,202		4,202
1.07%, 05/04/04²		4,202		4,202
Nationwide Building Society
1.09%, 07/23/04^2,4		6,303		6,303
1.17%, 12/28/04^2,4		8,403		8,403
Northern Rock PLC
1.11%, 01/13/05^2,4		7,983		7,983
Permanent Financing PLC
1.06%, 12/10/04²		4,202		4,202
Sigma Finance Inc.
1.06%, 07/01/04²		4,202		4,201
1.06%, 07/20/04²		4,202		4,201
1.09%, 10/07/04²		8,403		8,402
1.24%, 08/06/04²		2,101		2,101
Tango Finance Corp.
1.05%, 01/18/05^2,4		3,698		3,697
1.06%, 07/15/04^2,4		2,521		2,521
1.07%, 02/25/05^2,4		4,706		4,705
1.10%, 07/06/04^2,4		2,521		2,521
WhistleJacket Capital LLC
1.05%, 09/15/04^2,4		4,202		4,201
1.32%, 02/04/05^2,4		2,101		2,100
White Pine Finance LLC
1.04%, 08/26/04^2,4		4,202		4,201
1.06%, 04/20/04^2,4		4,202		4,202
1.06%, 07/06/04^2,4		5,042		5,042
1.06%, 11/15/04^2,4		5,042		5,042

				213,614

COMMERCIAL PAPER – 0.05%
Amsterdam Funding Corp.
1.03%, 03/03/04²		6,303		6,302
Corporate Asset Funding Corp.
1.03%, 03/16/04²		4,202		4,200
1.05%, 05/21/04²		4,370		4,360
CRC Funding LLC
1.03%, 03/26/04²		3,361		3,359
Delaware Funding Corp.
1.02%, 03/16/04²		8,496		8,493
1.03%, 03/05/04²		3,756		3,755
Edison Asset Securitization
1.03%, 03/03/04²		6,303		6,302
Eureka Securitization Inc.
1.04%, 04/14/04²		5,042		5,036
Falcon Asset Securitization Corp.
1.03%, 03/10/04²		2,941		2,940


62		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

.Schedule of Investments (Unaudited) (Continued)

iSHARES MSCI UNITED KINGDOM INDEX FUND

February 29, 2004


*Security*	*Principal*		*Value*
Galaxy Funding Inc.
1.05%, 05/17/04²	$	4,202	$	4,192
Gemini Securitization Corp.
1.04%, 04/19/04²		2,101		2,098
GIRO Funding US Corp.
1.05%, 05/19/04²		2,101		2,096
Jupiter Securitization Corp.
1.03%, 03/24/04²		4,202		4,199
Liberty Street Funding Corp.
1.03%, 03/10/04²		1,681		1,680
New Center Asset Trust
1.04%, 03/01/04²		2,101		2,101
Park Avenue Receivables Corp.
1.03%, 03/22/04²		3,453		3,450
Preferred Receivables Funding Corp.
1.04%, 03/15/04²		8,403		8,400
1.04%, 05/20/04²		2,101		2,096
Receivables Capital Corp.
1.03%, 03/15/04²		9,160		9,156
Windmill Funding Corp.
1.03%, 03/05/04²		4,798		4,798

				89,013
TIME DEPOSITS – 0.04%
Abbey National Treasury Services PLC
1.02%, 03/01/04²		8,403		8,407
1.33%, 02/10/05²		4,202		4,201
1.39%, 02/02/05²		4,202		4,201
1.40%, 10/25/04²		8,403		8,403
Bank of New York
1.39%, 11/01/04²		8,403		8,403
Bank of Novia Scotia
1.24%, 10/07/04²		6,303		6,302
1.42%, 10/29/04²		6,303		6,303
SunTrust Bank
1.01%, 03/01/04²		13,866		13,866
Toronto-Dominion Bank
1.34%, 02/10/05²		3,361		3,361
1.41%, 11/01/04²		6,303		6,302

				69,749
U.S. GOVERNMENT AGENCY NOTES – 0.01%
Federal Home Loan Mortgage Corp.
1.15%, 05/12/04²		6,303		6,288
1.28%, 08/19/04²		3,361		3,341
Federal National Mortgage Association
1.28%, 08/20/04²		10,924		10,858

				20,487
REPURCHASE AGREEMENTS – 0.00%
Merrill Lynch Government Securities Inc.
1.06%, 03/01/04²		8,403		8,403

				8,403

TOTAL SHORT-TERM INVESTMENTS (Cost: $791,221)				791,221

TOTAL INVESTMENTS IN SECURITIES – 100.17% (Cost $182,661,635)				189,129,580
Other Assets, Less Liabilities – (0.17%)				(313,996	)

NET ASSETS – 100.00%			$	188,815,584

¹	Non-income earning securities.

²	All or a portion of this security represents investments of securities lending collateral.

³	Issuer is an affiliate of the Fund’s investment advisor. See Note 2.

⁴	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		63

Statements of Assets and Liabilities (Unaudited)

iSHARES, INC.

February 29, 2004


	*iShares MSCI*
	Austria Index Fund			Belgium Index Fund			EMU Index Fund			France Index Fund			Germany Index Fund			Italy Index Fund
	Austria Index Fund			Belgium Index Fund			EMU Index Fund			France Index Fund			Germany Index Fund			Italy Index Fund
ASSETS
Investments at cost	$	46,111,320		$	21,787,982		$	343,241,471		$	59,157,444		$	202,755,515		$	34,304,961

Foreign currency, at cost	$	39,789		$	7,556		$	126,657		$	6,792		$	17,119		$	14,575

Investments in securities, at value (including securities on loan^a) (Note 1)	$	54,739,405		$	22,956,907		$	379,812,694		$	61,367,682		$	188,748,027		$	35,850,124
Foreign currency, at value		39,569			7,405			126,657			6,792			17,127			14,385
Receivables:
Investment securities sold		693,686			219,736			2,278,540			763,886			—			709,858
Dividends and interest		1,439			42,317			226,944			88,122			19,913			65,696
Capital shares sold		10,128			—			—			—			—			—

Total Assets		55,484,227			23,226,365			382,444,835			62,226,482			188,785,067			36,640,063

LIABILITIES
Payables:
Investment securities purchased		698,306			227,810			2,293,489			758,314			—			698,030
Collateral for securities on loan (Note 5)		10,686,808			3,098,894			74,363,542			2,339,647			42,783,056			8,301,315
Advisory fees (Note 2)		25,990			13,052			274,713			56,935			141,736			26,883
Distribution fees		10,953			5,513			116,163			24,007			59,888			11,364

Total Liabilities		11,422,057			3,345,269			77,047,907			3,178,903			42,984,680			9,037,592

NET ASSETS	$	44,062,170		$	19,881,096		$	305,396,928		$	59,047,579		$	145,800,387		$	27,602,471

Net assets consist of:
Paid-in capital	$	36,980,129		$	20,079,730		$	285,491,003		$	63,409,156		$	186,798,145		$	30,718,166
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		(186,394	)		(114,048	)		(429,423	)		(212,311	)		(160,425	)		(89,877	)
Accumulated net realized loss		(1,359,430	)		(1,262,745	)		(16,283,872	)		(6,371,668	)		(26,829,835	)		(4,586,572	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		8,627,865			1,178,159			36,619,220			2,222,402			(14,007,498	)		1,560,754

NET ASSETS	$	44,062,170		$	19,881,096		$	305,396,928		$	59,047,579		$	145,800,387		$	27,602,471

Shares outstanding		2,900,000			1,400,000			4,850,000			2,800,000			9,000,000			1,350,000

Net asset value per share	$	15.19		$	14.20		$	62.97		$	21.09		$	16.20		$	20.45

^a	Securities on loan with market values of $10,174,847, $2,941,168, $70,680,080, $2,226,050, $40,724,698 and $7,862,147, respectively. See Note 5.

See notes to financial statements.


64		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES, INC.

February 29, 2004


	*iShares MSCI*
	Netherlands Index Fund			Spain Index Fund			Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
ASSETS
Investments at cost	$	23,665,547		$	53,175,148		$	30,672,207		$	47,491,342		$	182,661,635

Foreign currency, at cost	$	33,627		$	82,067		$	7,768		$	17,030		$	218,546

Investments in securities, at value (including securities on loan^a) (Note 1)	$	22,137,573		$	66,540,175		$	35,849,945		$	53,067,751		$	189,129,580
Foreign currency, at value		33,619			81,172			7,554			16,971			216,924
Receivables:
Investment securities sold		—			—			150,281			192,487			532,901
Dividends and interest		65			9,765			1,907			219,403			567,898
Capital shares sold		—			—			—			—			8,941

Total Assets		22,171,257			66,631,112			36,009,687			53,496,612			190,456,244

LIABILITIES
Payables:
Investment securities purchased		—			—			123,302			167,484			629,652
Collateral for securities on loan (Note 5)		393,684			13,976,509			7,951,436			7,843,420			767,374
Advisory fees (Note 2)		21,053			48,944			23,354			43,042			171,225
Distribution fees		8,872			20,706			9,885			18,167			72,409

Total Liabilities		423,609			14,046,159			8,107,977			8,072,113			1,640,660

NET ASSETS	$	21,747,648		$	52,584,953		$	27,901,710		$	45,424,499		$	188,815,584

Net assets consist of:
Paid-in capital	$	31,482,586		$	41,462,091		$	30,061,447		$	47,030,577		$	206,186,086
Undistributed net investment income (accumulated net investment loss)		(44,250	)		200,586			(80,642	)		(20,383	)		292,908
Accumulated net realized loss		(8,162,700	)		(2,442,593	)		(7,256,375	)		(7,173,225	)		(24,119,787	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		(1,527,988	)		13,364,869			5,177,280			5,587,530			6,456,377

NET ASSETS	$	21,747,648		$	52,584,953		$	27,901,710		$	45,424,499		$	188,815,584

Shares outstanding		1,300,000			1,800,000			1,650,000			3,000,000			11,800,000

Net asset value per share	$	16.73		$	29.21		$	16.91		$	15.14		$	16.00

^a	Securities on loan with market values of $374,587, $13,292,632, $7,554,699, $7,464,521 and $730,304, respectively. See Note 5.

See notes to financial statements.


FINANCIAL STATEMENTS		65

Statements of Operations (Unaudited)

iSHARES, INC.

For the six months ended February 29, 2004


	*iShares MSCI*
	Austria Index Fund			Belgium Index Fund			EMU Index Fund			France Index Fund			Germany Index Fund			Italy Index Fund
NET INVESTMENT INCOME
Dividends^a	$	—		$	20,687		$	470,901		$	13,732		$	309,428		$	14,260
Interest		732			304			5,234			297			3,942			618
Securities lending income		4,453			7,540			57,842			5,811			43,480			9,515

Total investment income		5,185			28,531			533,977			19,840			356,850			24,393

EXPENSES (Note 2)
Advisory fees		66,477			44,267			669,988			163,058			363,324			80,261
Distribution fees		28,168			18,757			283,893			69,093			153,951			34,009

Total expenses		94,645			63,024			953,881			232,151			517,275			114,270

Net investment loss		(89,460	)		(34,493	)		(419,904	)		(212,311	)		(160,425	)		(89,877	)

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		372,034			(40,271	)		(3,787,489	)		(493,434	)		(3,721,778	)		(299,341	)
In-kind redemptions		2,181,004			1,722,264			—			1,524,331			7,014,115			771,285
Foreign currency transactions		3,988			(458	)		21,535			3,581			10,047			2,219

Net realized gain (loss)		2,557,026			1,681,535			(3,765,954	)		1,034,478			3,302,384			474,163

Net change in unrealized appreciation (depreciation) on:
Investments		5,320,061			2,854,581			55,102,402			12,200,596			27,752,487			6,038,251
Translation of assets and liabilities in foreign currencies		1,752			6,285			44,423			11,709			4,620			8,627

Net change in unrealized appreciation (depreciation)		5,321,813			2,860,866			55,146,825			12,212,305			27,757,107			6,046,878

Net realized and unrealized gain		7,878,839			4,542,401			51,380,871			13,246,783			31,059,491			6,521,041

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	7,789,379		$	4,507,908		$	50,960,967		$	13,034,472		$	30,899,066		$	6,431,164

^a	Net of foreign withholding tax of $—, $3,569, $76,739, $1,206, $54,605 and $1,945, respectively.

See notes to financial statements.


66		2002 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES, INC.

For the six months ended February 29, 2004


	*iShares MSCI*
	Netherlands Index Fund			Spain Index Fund			Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
NET INVESTMENT INCOME
Dividends^a	$	37,040		$	403,236		$	—		$	140,474		$	1,858,411
Interest		111			1,459			554			573			700
Securities lending income		3,456			17,881			5,546			2,285			2,176

Total investment income		40,607			422,576			6,100			143,332			1,861,287


EXPENSES (Note 2)
Advisory fees		59,602			136,917			60,926			114,990			484,171
Distribution fees		25,255			58,016			25,816			48,725			205,157

Total expenses		84,857			194,933			86,742			163,715			689,328

Net investment income (loss)		(44,250	)		227,643			(80,642	)		(20,383	)		1,171,959

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments		(215,287	)		(133,358	)		(179,986	)		(621,097	)		(1,796,613	)
In-kind redemptions		—			2,603,237			—			—			1,183,528
Foreign currency transactions		7,554			1,436			1,579			21			111,309

Net realized gain (loss)		(207,733	)		2,471,315			(178,407	)		(621,076	)		(501,776	)

Net change in unrealized appreciation (depreciation) on:
Investments		3,875,007			9,959,281			6,402,248			8,836,180			37,973,986
Translation of assets and liabilities in foreign currencies		5,948			4,826			(328	)		10,789			9,737

Net change in unrealized appreciation (depreciation)		3,880,955			9,964,107			6,401,920			8,846,969			37,983,723

Net realized and unrealized gain		3,673,222			12,435,422			6,223,513			8,225,893			37,481,947

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,628,972		$	12,663,065		$	6,142,871		$	8,205,510		$	38,653,906

^a	Net of foreign withholding tax of $6,536, $71,039, $—, $2,192 and $206,496, respectively.

see notes to financial statements.


FINANCIAL STATEMENTS		67

Statement of Changes in Net Assets

iSHARES, INC.


	*iShares MSCI* *Austria* *Index Fund*						*iShares MSCI* *Belgium* *Index Fund*						*iShares MSCI* *EMU* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	(89,460	)	$	166,934		$	(34,493	)	$	809,843		$	(419,904	)	$	2,947,241
Net realized gain (loss)		2,557,026			(152,796	)		1,681,535			1,821,007			(3,765,954	)		(5,916,411	)
Net change in unrealized appreciation (depreciation)		5,321,813			4,589,365			2,860,866			711,331			55,146,825			18,491,963

Net increase in net assets resulting from operations		7,789,379			4,603,503			4,507,908			3,342,181			50,960,967			15,522,793

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(272,938	)		(208,682	)		(884,836	)		(132,112	)		(3,047,220	)		(1,485,447	)

Total distributions to shareholders		(272,938	)		(208,682	)		(884,836	)		(132,112	)		(3,047,220	)		(1,485,447	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		21,153,879			6,782,294			7,607,316			36,573,861			92,094,715			20,183,374
Cost of shares redeemed		(6,896,454	)		(3,629,301	)		(13,220,505	)		(28,339,593	)		—			—

Net increase (decrease) in net assets from capital share transactions		14,257,425			3,152,993			(5,613,189	)		8,234,268			92,094,715			20,183,374


INCREASE (DECREASE) IN NET ASSETS		21,773,866			7,547,814			(1,990,117	)		11,444,337			140,008,462			34,220,720
NET ASSETS:
Beginning of period		22,288,304			14,740,490			21,871,213			10,426,876			165,388,466			131,167,746

End of period	$	44,062,170		$	22,288,304		$	19,881,096		$	21,871,213		$	305,396,928		$	165,388,466

Undistributed (distributions in excess of) Net investment income included in net assets at end of period	$	(186,394	)	$	176,004		$	(114,048	)	$	805,281		$	(429,423	)	$	3,037,701

SHARES ISSUED AND REDEEMED:
Shares sold		1,400,000			700,000			520,000			3,840,000			1,550,000			450,000
Shares redeemed		(600,000	)		(400,000	)		(1,080,000	)		(2,880,000	)		—			—

Net increase (decrease) in shares outstanding		800,000			300,000			(560,000	)		960,000			1,550,000			450,000

see notes to financial statements.


68		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *France* *Index Fund*						*iShares MSCI* *Germany* *Index Fund*						*iShares MSCI* *Italy* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	(212,311	)	$	751,423		$	(160,425	)	$	1,675,435		$	(89,877	)	$	826,393
Net realized gain (loss)		1,034,478			(3,038,659	)		3,302,384			(7,284,602	)		474,163			(412,813	)
Net change in unrealized appreciation (depreciation)		12,212,305			7,255,337			27,757,107			16,801,013			6,046,878			3,106,712

Net increase in net assets resulting from operations		13,034,472			4,968,101			30,899,066			11,191,846			6,431,164			3,520,292

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(794,879	)		(567,205	)		(1,804,102	)		(838,725	)		(824,876	)		(733,556	)

Total distributions to shareholders		(794,879	)		(567,205	)		(1,804,102	)		(838,725	)		(824,876	)		(733,556	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		—			—			32,997,769			24,678,639			—			2,068,633
Cost of shares redeemed		(7,267,190	)		—			(18,092,556	)		(27,391,209	)		(8,001,044	)		(4,396,226	)

Net increase (decrease) in net assets from capital share transactions		(7,267,190	)		—			14,905,213			(2,712,570	)		(8,001,044	)		(2,327,593	)

INCREASE (DECREASE) IN NET ASSETS		4,972,403			4,400,896			44,000,177			7,640,551			(2,394,756	)		459,143

NET ASSETS:
Beginning of period		54,075,176			49,674,280			101,800,210			94,159,659			29,997,227			29,538,084

End of period	$	59,047,579		$	54,075,176		$	145,800,387		$	101,800,210		$	27,602,471		$	29,997,227

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(212,311	)	$	794,879		$	(160,425	)	$	1,804,102		$	(89,877	)	$	824,876

SHARES ISSUED AND REDEEMED:
Shares sold		—			—			2,100,000			2,700,000			—			150,000
Shares redeemed		(400,000	)		—			(1,200,000	)		(2,400,000	)		(450,000	)		(300,000	)

Net increase (decrease) in shares outstanding		(400,000	)		—			900,000			300,000			(450,000	)		(150,000	)

See notes to financial statements.


FINANCIAL STATEMENTS		69

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *Netherlands* *Index Fund*						*iShares MSCI* *Spain* *Index Fund*						*iShares MSCI* *Sweden* *Index Fund*
	For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	(44,250	)	$	461,181		$	227,643		$	433,459		$	(80,642	)	$	316,152
Net realized gain (loss)		(207,733	)		(2,384,716	)		2,471,315			(400,527	)		(178,407	)		(1,250,998	)
Net change in unrealized appreciation (depreciation)		3,880,955			2,574,851			9,964,107			10,543,059			6,401,920			5,001,133

Net increase in net assets resulting from operations		3,628,972			651,316			12,663,065			10,575,991			6,142,871			4,066,287

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(480,580	)		(320,678	)		(464,559	)		(163,361	)		(332,115	)		(100,930	)

Total distributions to shareholders		(480,580	)		(320,678	)		(464,559	)		(163,361	)		(332,115	)		(100,930	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		—			12,435,251			2,263,744			34,361,557			5,099,033			14,403,629
Cost of shares redeemed		—			(13,270,048	)		(12,249,249	)		(13,252,013	)		—			(9,531,073	)

Net increase (decrease) in net assets from capital share transactions		—			(834,797	)		(9,985,505	)		21,109,544			5,099,033			4,872,556

INCREASE (DECREASE) IN NET ASSETS		3,148,392			(504,159	)		2,213,001			31,522,174			10,909,789			8,837,913

NET ASSETS:
Beginning of period		18,599,256			19,103,415			50,371,952			18,849,778			16,991,921			8,154,008

End of period	$	21,747,648		$	18,599,256		$	52,584,953		$	50,371,952		$	27,901,710		$	16,991,921

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(44,250	)	$	480,580		$	200,586		$	437,502		$	(80,642	)	$	332,115

SHARES ISSUED AND REDEEMED:
Shares sold		—			1,050,000			75,000			1,875,000			300,000			1,500,000
Shares redeemed		—			(1,050,000	)		(525,000	)		(675,000	)		—			(975,000	)

Net increase (decrease) in shares outstanding		—			—			(450,000	)		1,200,000			300,000			525,000

See notes to financial statements.


70		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES, INC.


	*iShares MSCI* *Switzerland* *Index Fund*						*iShares MSCI* *United Kingdom* *Index Fund*
	For the six months ended February 29, 2004 (unaudited)			For the year ended August 31, 2003			For the six months ended February 29, 2004 (Unaudited)			For the year ended August 31, 2003
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	(20,383	)	$	124,078		$	1,171,959		$	4,728,393
Net realized gain (loss)		(621,076	)		(2,929,581	)		(501,776	)		2,870,683
Net change in unrealized appreciation (depreciation)		8,846,969			4,321,125			37,983,723			4,860,539

Net increase in net assets resulting from operations		8,205,510			1,515,622			38,653,906			12,459,615

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(146,432	)		(73,589	)		(5,320,972	)		(2,770,755	)

Total distributions to shareholders		(146,432	)		(73,589	)		(5,320,972	)		(2,770,755	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		3,722,133			2,976,574			12,685,389			76,462,198
Cost of shares redeemed		—			(2,658,605	)		(8,011,981	)		(55,409,169	)

Net increase in net assets from capital share transactions		3,722,133			317,969			4,673,408			21,053,029

INCREASE IN NET ASSETS		11,781,211			1,760,002			38,006,342			30,741,889

NET ASSETS:
Beginning of period		33,643,288			31,883,286			150,809,242			120,067,353

End of period	$	45,424,499		$	33,643,288		$	188,815,584		$	150,809,242

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(20,383	)	$	146,432		$	292,908		$	4,441,921

SHARES ISSUED AND REDEEMED:
Shares sold		250,000			250,000			800,000			6,600,000
Shares redeemed		—			(250,000	)		(600,000	)		(4,400,000	)

Net increase in shares outstanding		250,000			—			200,000			2,200,000

See notes to financial statements.


FINANCIAL STATEMENTS		71

Financial Highlights

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Austria Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year Ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	10.61		$	8.19		$	8.18		$	7.67		$	9.13		$	10.11

Income from investment operations:
Net investment income (loss)³		(0.05	)		0.09			0.13			0.13			0.04			0.10
Net realized and unrealized gain (loss)		4.80			2.43			(0.12	)		0.52			(1.46	)		(0.08	)

Total from investment operations		4.75			2.52			0.01			0.65			(1.42	)		(0.88	)

Less distributions from:
Net investment income		(0.17	)		(0.10	)		—			(0.14	)		(0.04	)		(0.08	)
Return of capital		—			—			—			(0.00	)⁵		—			(0.02	)

Total distributions		(0.17	)		(0.10	)		—			(0.14	)		(0.04	)		(0.10	)

Net asset value, end of period	$	15.19		$	10.61		$	8.19		$	8.18		$	7.67		$	9.13

Total return		45.03	%⁶		31.15	%		0.12	%		8.41	%		(15.51	)%		(8.69	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	44,062		$	22,288		$	14,740		$	11,447		$	10,741		$	12,776
Ratio of expenses to average net assets⁷		0.84	%		0.84	%		0.84	%		0.84	%¹		1.16	%¹		1.31	%
Ratio of net investment income (loss) to average net assets⁷		(0.79	)%		0.98	%		1.57	%		1.69	%²		0.51	%²		1.04	%
Portfolio turnover rate⁴		8	%		26	%		32	%		66	%		34	%		50	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the years ended August 31, 2001 and August 31, 2000 were 0.97% and 1.20%, respectively.

²	Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the years ended August 31, 2001 and August 31, 2000 were 1.55% and 0.47%, respectively.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Rounds to less than $0.01.

⁶	Not annualized.

⁷	Annualized for periods of less than one year.

See notes to financial statements.


72		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Belgium Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year Ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	11.16		$	10.43		$	11.81		$	13.23		$	16.07		$	18.40

Income from investment operations:
Net investment income (loss)³		(0.03	)		0.41			0.25			0.19			0.19			0.08
Net realized and unrealized gain (loss)		4.08			0.43			(1.56	)		(1.34	)		(2.67	)		(0.30	)

Total from investment operations		4.05			0.84			(1.31	)		(1.15	)		(2.48	)		(0.22	)

Less distributions from:
Net investment income		(1.01	)		(0.11	)		(0.07	)		(0.27	)		(0.36	)		(0.01	)
Net realized gain		—			—			—			—			—			(1.19	)
Return of capital		—			—			—			—			—			(0.91	)

Total distributions		(1.01	)		(0.11	)		(0.07	)		(0.27	)		(0.36	)		(2.11	)

Net asset value, end of period	$	14.20		$	11.16		$	10.43		$	11.81		$	13.23		$	16.07

Total return		37.36	%⁵		8.25	%		(11.10	)%		(8.72	)%		(15.50	)%		(1.00	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	19,881		$	21,871		$	10,427		$	9,918		$	13,230		$	13,496
Ratio of expenses to average net assets⁶		0.84	%		0.84	%		0.84	%		0.84	%¹		1.13	%		1.24	%
Ratio of net investment income (loss) to average net assets⁶		(0.46	)%		4.10	%		2.26	%		1.60	%²		1.36	%		0.45	%
Portfolio turnover rate⁴		4	%		8	%		18	%		36	%		53	%		63	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.87%.

²	Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 1.57%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Not annualized.

⁶	Annualized for periods of less than one year.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		73

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI EMU Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Period From Jul. 25, 2000⁸ to Aug. 31, 2000
Net asset value, beginning of period	$	50.12		$	46.02		$	56.74		$	76.02		$	80.72

Income from investment operations:
Net investment income (loss)³		(0.11	)		0.93			0.75			0.72			(0.00	)⁵
Net realized and unrealized gain (loss)		13.75			3.62			(11.47	)		(19.32	)		(4.70	)

Total from investment operations		13.64			4.55			(10.72	)		(18.60	)		(4.70	)

Less distributions from:
Net investment income		(0.79	)		(0.45	)		—			(0.42	)		—
Return of capital		—			—			—			(0.26	)		—

Total distributions		(0.79	)		(0.45	)		—			(0.68	)		—

Net asset value, end of period	$	62.97		$	50.12		$	46.02		$	56.74		$	76.02

Total return		27.33	%⁶		10.05	%		(18.89	)%		(24.51	)%		(5.82	)%⁶

Ratios/Supplemental data:
Net assets, end of period (000s)	$	305,397		$	165,388		$	131,168		$	90,779		$	41,811
Ratio of expenses to average net assets⁷		0.84	%		0.84	%		0.84	%		0.84	%		0.84	%¹
Ratio of net investment income (loss) to average net assets⁷		(0.37	)%		2.08	%		1.44	%		1.13	%		0.03	%²
Portfolio turnover rate⁴		3	%		7	%		3	%		24	%		0	%

¹	Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.57%.

²	Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (0.70)%.

³	Based on average shares outstanding throughout the period.

⁴	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

⁵	Rounds to less than $0.01.

⁶	Not annualized.

⁷	Annualized for periods of less than one year.

⁸	Commencement of operations.

See notes to financial statements.


74		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI France Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	16.90		$	15.52		$	19.53		$	26.41		$	22.90		$	19.13

Income from investment operations:
Net investment income (loss)¹		(0.07	)		0.23			0.18			0.06			0.10			0.14
Net realized and unrealized gain (loss)		4.54			1.33			(4.19	)		(6.89	)		5.21			3.88

Total from investment operations		4.47			1.56			(4.01	)		(6.83	)		5.31			4.02

Less distributions from:
Net investment income		(0.28	)		(0.18	)		—			(0.04	)		(0.11	)		(0.12	)
Net realized gain		—			—			—			(0.00	)³		(1.67	)		(0.05	)
Return of capital		—			—			—			(0.01	)		(0.02	)		(0.08	)

Total distributions		(0.28	)		(0.18	)		—			(0.05	)		(1.80	)		(0.25	)

Net asset value, end of period	$	21.09		$	16.90		$	15.52		$	19.53		$	26.41		$	22.90

Total return		26.58	%⁴		10.22	%		(20.53	)%		(25.86	)%		23.45	%		21.01	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	59,048		$	54,075		$	49,674		$	58,602		$	95,116		$	77,885
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.96	%		1.06	%
Ratio of net investment income (loss) to average net assets⁵		(0.77	)%		1.56	%		1.00	%		0.28	%		0.36	%		0.67	%
Portfolio turnover rate²		2	%		9	%		3	%		14	%		17	%		0	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		75

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Germany Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	12.57		$	12.07		$	15.19		$	20.46		$	21.17		$	20.25

Income from investment operations:
Net investment income (loss)¹		(0.02	)		0.21			0.11			0.18			0.18			0.12
Net realized and unrealized gain (loss)		3.85			0.41			(3.23	)		(5.26	)		1.64			1.31

Total from investment operations		3.83			0.62			(3.12	)		(5.08	)		1.82			1.43

Less distributions from:
Net investment income		(0.20	)		(0.12	)		—			(0.19	)		(0.17	)		(0.11	)
Net realized gain		—			—			—			—			(2.32	)		(0.39	)
Return of capital		—			—			—			(0.00	)³		(0.04	)		(0.01	)

Total distributions		(0.20	)		(0.12	)		—			(0.19	)		(2.53	)		(0.51	)

Net asset value, end of period	$	16.20		$	12.57		$	12.07		$	15.19		$	20.46		$	21.17

Total return		30.54	%⁴		5.39	%		(20.54	)%		(24.87	)%		8.44	%		7.04	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	145,800		$	101,800		$	94,160		$	118,525		$	153,487		$	101,645
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.94	%		1.00	%
Ratio of net investment income (loss) to average net assets⁵		(0.26	)%		1.98	%		0.77	%		0.99	%		0.73	%		0.57	%
Portfolio turnover rate²		6	%		11	%		9	%		20	%		56	%		14	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


76		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Italy Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	16.67		$	15.15		$	17.79		$	22.23		$	21.56		$	22.89

Income from investment operations:
Net investment income (loss)¹		(0.06	)		0.43			0.37			0.24			0.39			0.17
Net realized and unrealized gain (loss)		4.45			1.47			(3.01	)		(4.37	)		2.51			1.05

Total from investment operations		4.39			1.90			(2.64	)		(4.13	)		2.90			1.22

Less distributions from:
Net investment income		(0.61	)		(0.38	)		—			(0.24	)		(0.12	)		(0.06	)
Net realized gain		—			—			—			(0.07	)		(1.80	)		(2.24	)
Return of capital		—			—			—			(0.00	)³		(0.31	)		(0.25	)

Total distributions		(0.61	)		(0.38	)		—			(0.31	)		(2.23	)		(2.55	)

Net asset value, end of period	$	20.45		$	16.67		$	15.15		$	17.79		$	22.23		$	21.56

Total return		26.58	%⁴		12.79	%		(14.84	)%		(18.61	)%		13.35	%		5.14	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	27,602		$	29,997		$	29,538		$	34,682		$	50,008		$	58,224
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.99	%		1.03	%
Ratio of investment income (loss) to average net assets⁵		(0.66	)%		2.84	%		2.34	%		1.16	%		1.61	%		0.70	%
Portfolio turnover rate²		4	%		22	%		10	%		20	%		40	%		8	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		77

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Netherlands Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	14.31		$	14.69		$	18.59		$	23.53		$	23.45		$	23.50

Income from investment operations:
Net investment income (loss)¹		(0.03	)		0.30			0.25			0.28			0.13			0.53
Net realized and unrealized gain (loss)		2.82			(0.43	)		(4.11	)		(4.94	)		0.18			1.60

Total from investment operations		2.79			(0.13	)		(3.86	)		(4.66	)		0.31			2.13

Less distributions from:
Net investment income		(0.37	)		(0.25	)		(0.04	)		(0.28	)		(0.08	)		(0.44	)
Net realized gain		—			—			—			—			(0.11	)		(1.66	)
Return of capital		—			—			—			—			(0.04	)		(0.08	)

Total distributions		(0.37	)		(0.25	)		(0.04	)		(0.28	)		(0.23	)		(2.18	)

Net asset value, end of period	$	16.73		$	14.31		$	14.69		$	18.59		$	23.53		$	23.45

Total return		19.65	%³		(0.78	)%		(20.79	)%		(19.83	)%		1.28	%		8.98	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	21,748		$	18,599		$	19,103		$	24,184		$	30,613		$	31,685
Ratio of expenses to average net assets⁴		0.84	%		0.84	%		0.84	%		0.84	%		1.03	%		1.07	%
Ratio of net investment income (loss) to average net assets⁴		(0.44	)%		2.37	%		1.48	%		1.34	%		0.53	%		2.20	%
Portfolio turnover rate²		4	%		18	%		15	%		35	%		22	%		32	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Not annualized.

⁴	Annualized for periods of less than one year.

See notes to financial statements.


78		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Spain Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	22.39		$	17.95		$	21.33		$	24.19		$	25.59		$	23.84

Income from investment operations:
Net investment income¹		0.13			0.24			0.17			0.19			0.15			0.09
Net realized and unrealized gain (loss)		6.96			4.36			(3.55	)		(2.89	)		(0.60	)		3.14

Total from investment operations		7.09			4.60			(3.38	)		(2.70	)		(0.45	)		3.23

Less distributions from:
Net investment income		(0.27	)		(0.16	)		—			(0.16	)		(0.14	)		(0.09	)
Net realized gain		—			—			—			—			(0.80	)		(1.35	)
Return of capital		—			—			—			(0.00	)³		(0.01	)		(0.04	)

Total distributions		(0.27	)		(0.16	)		—			(0.16	)		(0.95	)		(1.48	)

Net asset value, end of period	$	29.21		$	22.39		$	17.95		$	21.33		$	24.19		$	25.59

Total return		31.77	%⁴		25.81	%		(15.85	)%		(11.17	)%		(1.81	)%		13.39	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	52,585		$	50,372		$	18,850		$	27,198		$	39,913		$	36,469
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		0.99	%		1.04	%
Ratio of net investment income to average net assets⁵		0.98	%		1.22	%		0.85	%		0.82	%		0.57	%		0.31	%
Portfolio turnover rate²		3	%		17	%		14	%		26	%		39	%		17	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		79

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Sweden Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	12.59		$	9.88		$	12.88		$	24.38		$	22.26		$	18.39

Income from investment operations:
Net investment income (loss)¹		(0.06	)		0.25			0.12			0.07			0.14			0.10
Net realized and unrealized gain (loss)		4.63			2.58			(3.12	)		(11.52	)		8.38			4.52

Total from investment operations		4.57			2.83			(3.00	)		(11.45	)		8.52			4.62

Less distributions from:
Net investment income		(0.25	)		(0.12	)		—			(0.05	)		(0.14	)		(0.10	)
Net realized gain		—			—			—			—			(6.22	)		(0.63	)
Return of capital		—			—			—			(0.00	)³		(0.04	)		(0.02	)

Total distributions		(0.25	)		(0.12	)		—			(0.05	)		(6.40	)		(0.75	)

Net asset value, end of period	$	16.91		$	12.59		$	9.88		$	12.88		$	24.38		$	22.26

Total return		36.54	%⁴		29.04	%		(23.29	)%		(46.99	)%		39.15	%		25.09	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	27,902		$	16,992		$	8,154		$	10,630		$	23,774		$	20,034
Ratio of expenses to average net assets⁵		0.84	%		0.84	%		0.84	%		0.84	%		1.03	%		1.13	%
Ratio of net investment income (loss) to average net assets⁵		(0.78	)%		2.44	%		0.98	%		0.40	%		0.46	%		0.49	%
Portfolio turnover rate²		1	%		12	%		31	%		43	%		90	%		33	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Rounds to less than $0.01.

⁴	Not annualized.

⁵	Annualized for periods of less than one year.

See notes to financial statements.


80		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Switzerland Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	12.23		$	11.59		$	12.95		$	15.54		$	15.39		$	15.55

Income from investment operations:
Net investment income (loss)¹		(0.01	)		0.05			0.03			0.04			0.04			0.04
Net realized and unrealized gain (loss)		2.97			0.62			(1.38	)		(2.54	)		0.27			0.19

Total from investment operations		2.96			0.67			(1.35	)		(2.50	)		0.31			0.23

Less distributions from:
Net investment income		(0.05	)		(0.03	)		(0.01	)		(0.05	)		(0.04	)		(0.07	)
Net realized gain		—			—			—			(0.04	)		(0.11	)		(0.31	)
Return of capital		—			—			—			—			(0.01	)		(0.01	)

Total distributions		(0.05	)		(0.03	)		(0.01	)		(0.09	)		(0.16	)		(0.39	)

Net asset value, end of period	$	15.14		$	12.23		$	11.59		$	12.95		$	15.54		$	15.39

Total return		24.15	%⁴		5.89	%		(10.47	)%		(16.08	)%		1.96	%		1.47	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	45,424		$	33,643		$	31,883		$	32,384		$	44,685		$	38,499
Ratio of expenses to average net assets³		0.84	%		0.84	%		0.84	%		0.84	%		1.01	%		1.09	%
Ratio of net investment income (loss) to average net assets³		(0.10	)%		0.43	%		0.20	%		0.29	%		0.23	%		0.24	%
Portfolio turnover rate²		2	%		10	%		12	%		34	%		35	%		35	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Annualized for periods of less than one year.

⁴	Not annualized.

See notes to financial statements.


FINANCIAL HIGHLIGHTS		81

Financial Highlights (Continued)

iSHARES, INC.

(For a share outstanding throughout each period)


	*iShares MSCI United Kingdom Index Fund*
	Six months ended Feb. 29, 2004 (Unaudited)			Year ended Aug. 31, 2003			Year ended Aug. 31, 2002			Year ended Aug. 31, 2001			Year ended Aug. 31, 2000			Year ended Aug. 31, 1999
Net asset value, beginning of period	$	13.00		$	12.77		$	15.11		$	18.35		$	20.25		$	18.48

Income from investment operations:
Net investment income¹		0.11			0.39			0.48			0.26			0.27			0.44
Net realized and unrealized gain (loss)		3.37			0.12			(2.60	)		(3.23	)		(0.85	)		2.40

Total from investment operations		3.48			0.51			(2.12	)		(2.97	)		(0.58	)		2.84

Less distributions from:
Net investment income		(0.48	)		(0.28	)		(0.22	)		(0.25	)		(0.25	)		(0.37	)
Net realized gain		—			—			—			(0.02	)		(1.03	)		(0.62	)
Return of capital		—			—			—			—			(0.04	)		(0.08	)

Total distributions		(0.48	)		(0.28	)		(0.22	)		(0.27	)		(1.32	)		(1.07	)

Net asset value, end of period	$	16.00		$	13.00		$	12.77		$	15.11		$	18.35		$	20.25

Total return		26.99	%⁴		4.20	%		(14.19	)%		(16.20	)%		(3.00	)%		15.33	%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	188,816		$	150,809		$	120,067		$	117,883		$	146,803		$	113,402
Ratio of expenses to average net assets³		0.84	%		0.84	%		0.84	%		0.84	%		0.94	%		0.97	%
Ratio of net investment income to average net assets³		1.43	%		3.23	%		3.39	%		1.57	%		1.39	%		2.16	%
Portfolio turnover rate²		2	%		6	%		14	%		30	%		33	%		13	%

¹	Based on average shares outstanding throughout the period.

²	Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

³	Not annualized.

⁴	Annualized for periods of less than one year.

See notes to financial statements.


82		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited)

iSHARES, INC.

1. SIGNIFICANT ACCOUNTING POLICIES

iShares, Inc. (the “Company”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994. As of February 29, 2004, the Company offered 24 investment portfolios or funds.

These financial statements relate only to the iShares MSCI Austria, iShares MSCI Belgium, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands, iShares MSCI Spain, iShares MSCI Sweden, iShares MSCI Switzerland and iShares MSCI United Kingdom Index Funds (each a “Fund”, collectively the “Funds”).

Each Fund invests in the securities of foreign issuers of a single country or region, which may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization of expropriation of assets; and the risk of war.

Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.

SECURITY VALUATION

Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark indices used by the Funds. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.


NOTES TO THE FINANCIAL STATEMENTS		83

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

FOREIGN CURRENCY TRANSLATION

DISTRIBUTIONS TO SHAREHOLDERS

At August 31, 2003, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:


*iShares MSCI Index Fund*	Undistributed Ordinary *Income*		Unrealized Appreciation (Depreciation)			Capital and Other Losses			Total Distributable Earnings (Accumulated Losses)
Austria	$	272,938	$	3,091,009		$	(3,798,347	)	$	(434,400	)
Belgium		884,836		(2,123,900	)		(2,582,642	)		(3,821,706	)
EMU		3,047,220		(23,538,270	)		(7,516,772	)		(28,007,822	)
France		794,879		9,255,419			(6,671,662	)		3,378,636
Germany		1,804,102		(44,771,009	)		(27,125,009	)		(70,091,916	)
Italy		824,876		(4,820,694	)		(4,726,165	)		(8,721,983	)
Netherlands		480,580		(6,102,051	)		(7,261,859	)		(12,883,330	)
Spain		437,502		2,850,065			(4,363,211	)		(1,075,644	)
Sweden		332,115		(1,750,242	)		(6,552,366	)		(7,970,493	)
Switzerland		146,432		(3,788,234	)		(6,023,354	)		(9,665,156	)
United Kingdom		4,486,489		(34,524,058	)		(20,665,867	)		(50,703,436	)


84		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

FEDERAL INCOME TAXES

The Funds had tax basis net capital loss carryforwards at August 31, 2003, the tax year-end of the Funds, as follows:


*iShares MSCI Index Fund*	Expiring 2007		Expiring 2008		Expiring 2009		*Expiring* *2010*		Expiring 2011		*Total*
Austria	$	4,273	$	551,208	$	336,553	$	1,291,324	$	370,948	$	2,554,306
Belgium		—		94,675		450,543		1,677,678		117,767		2,340,663
EMU		—		—		443		1,923,552		1,144,756		3,068,751
France		—		—		—		3,807,513		236,944		4,044,457
Germany		—		—		86,860		13,573,336		5,469,732		19,129,928
Italy		—		—		—		3,335,772		848,408		4,184,180
Netherlands		—		—		60,885		3,222,792		1,497,810		4,781,487
Spain		—		—		20,276		2,081,931		678,910		2,781,117
Sweden		—		—		126,557		3,350,244		1,577,551		5,054,352
Switzerland		—		—		—		2,855,879		1,018,305		3,874,184
United Kingdom		—		—		—		9,945,254		6,448,554		16,393,808

Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first.

For the year ended August 31, 2003, each Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies and realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.

REPURCHASE AGREEMENTS


NOTES TO THE FINANCIAL STATEMENTS		85

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Under the Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees.

For its investment advisory services to the Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds) as follows:


*Advisory Fee*		*Aggregate Net Assets*
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion


*iShares MSCI Index Fund*	*Securities Lending* *Agent Fees*
Austria	$	5,156
Belgium		7,704
EMU		63,926
France		5,966
Germany		47,205
Italy		10,742
Netherlands		3,471
Spain		19,186
Sweden		6,080
Switzerland		3,232
United Kingdom		2,216


86		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from each Fund, not to exceed 0.25% of the average daily net assets of such Fund, for distribution-related services.

Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended February 29, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board has concluded that all transactions executed during the first four months of the fiscal year were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the months of January and February 2004.

As a result of using an index approach to investing, the iShares MSCI United Kingdom Index Fund held shares of Barclays PLC, with a current market value of $5,541,922 as of February 29, 2004. Barclays PLC is an affiliate of BGFA, the Funds’ investment advisor.

As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, were as follows:


*iShares MSCI Index Fund*	*Purchases*		*Sales*
Austria	$	1,783,185	$	2,140,191
Belgium		567,431		1,247,516
EMU		5,985,378		8,752,466
France		1,311,854		2,313,954
Germany		6,824,678		8,632,290
Italy		964,962		1,848,368
Netherlands		732,418		1,078,128
Spain		1,173,293		1,421,115
Sweden		218,934		630,236
Switzerland		646,803		889,106
United Kingdom		2,457,040		5,708,246


NOTES TO THE FINANCIAL STATEMENTS		87

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

In-kind transactions for the six months ended February 29, 2004, were as follows:


*iShares MSCI Index Fund*	In-kind Purchases		*In-kind* *Sales*
Austria	$	21,131,002	$	6,887,674
Belgium		7,329,082		13,194,614
EMU		91,749,740		—
France		—		7,259,010
Germany		32,911,638		18,085,138
Italy		—		7,980,456
Spain		2,261,166		12,234,884
Sweden		5,100,204		—
Switzerland		3,712,739		—
United Kingdom		12,647,162		7,938,348

At February 29, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


*iShares MSCI Index Fund*	*Tax* *Cost*		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Austria	$	46,268,358	$	8,471,047	$	—		$	8,471,047
Belgium		22,098,685		1,440,361		(582,139	)		858,222
EMU		351,700,516		34,388,179		(6,276,001	)		28,112,178
France		59,337,908		12,075,896		(10,046,122	)		2,029,774
Germany		206,722,411		8,149,686		(26,124,070	)		(17,974,384	)
Italy		34,471,435		4,310,464		(2,931,775	)		1,378,689
Netherlands		24,355,656		968,219		(3,186,302	)		(2,218,083	)
Spain		53,413,866		13,241,721		(115,412	)		13,126,309
Sweden		31,450,530		4,758,894		(359,479	)		4,399,415
Switzerland		48,071,940		6,570,762		(1,574,951	)		4,995,811
United Kingdom		182,661,635		27,251,891		(20,783,946	)		6,467,945


88		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES, INC.

4. CAPITAL SHARE TRANSACTIONS

The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:


*iShares MSCI Index Fund*		*Authorized Shares*
Austria		19,800,000
Belgium		136,200,000
EMU		500,000,000
France		340,200,000
Germany		382,200,000
Italy		63,600,000
Netherlands		255,000,000
Spain		127,800,000
Sweden		63,600,000
Switzerland		318,625,000
United Kingdom		943,200,000

The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for purchase of Creation Units of a Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the corresponding MSCI Index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value equal to at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.

As of February 29, 2004, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.


NOTES TO THE FINANCIAL STATEMENTS		89

The iShares^{^®} Family of Funds

Broad Market

iShares Dow Jones U.S. Total Market Index Fund (IYY)

iShares Russell 3000 Index Fund (IWV)

iShares Russell 3000 Growth Index Fund (IWZ)

iShares Russell 3000 Value Index Fund (IWW)

iShares S&P 1500 Index Fund (ISI)

Large Cap

iShares Russell 1000 Index Fund (IWB)

iShares Russell 1000 Growth Index Fund (IWF)

iShares Russell 1000 Value Index Fund (IWD)

iShares S&P 100 Index Fund (OEF)

iShares S&P 500 Index Fund (IVV)

iShares S&P 500/BARRA Growth Index Fund (IVW)

iShares S&P 500/BARRA Value Index Fund (IVE)

Mid Cap

iShares Russell Midcap Index Fund (IWR)

iShares Russell Midcap Growth Index Fund (IWP)

iShares Russell Midcap Value Index Fund (IWS)

iShares S&P MidCap 400 Index Fund (IJH)

iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)

iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)

Small Cap

iShares Russell 2000 Index Fund (IWM)

iShares Russell 2000 Growth Index Fund (IWO)

iShares Russell 2000 Value Index Fund (IWN)

iShares S&P SmallCap 600 Index Fund (IJR)

iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)

iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)

Sector & Industry

iShares Cohen & Steers Realty Majors Index Fund (ICF)

iShares Dow Jones Transportation Average Index Fund (IYT)

iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)

iShares Dow Jones U.S. Energy Sector Index Fund (IYE)

iShares Dow Jones U.S. Financial Sector Index Fund (IYF)

iShares Dow Jones U.S. Financial Services Index Fund (IYG)

iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)

iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)

iShares Dow Jones U.S. Real Estate Index Fund (IYR)

iShares Dow Jones U.S. Technology Sector Index Fund (IYW)

iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)

iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)

iShares Goldman Sachs Natural Resources Index Fund (IGE)

iShares Goldman Sachs Networking Index Fund (IGN)

iShares Goldman Sachs Semiconductor Index Fund (IGW)

iShares Goldman Sachs Software Index Fund (IGV)

iShares Goldman Sachs Technology Index Fund (IGM)

iShares Nasdaq Biotechnology Index Fund (IBB)

Global Sector

iShares S&P Global Energy Sector Index Fund (IXC)

iShares S&P Global Financials Sector Index Fund (IXG)

iShares S&P Global Healthcare Sector Index Fund (IXJ)

iShares S&P Global Technology Sector Index Fund (IXN)

iShares S&P Global Telecommunications Sector Index Fund (IXP)

International/Broad Market

iShares MSCI EAFE Index Fund (EFA)

iShares MSCI Emerging Markets Index Fund (EEM)

International/Regional

iShares MSCI EMU Index Fund (EZU)

iShares MSCI Pacific ex-Japan Index Fund (EPP)

iShares S&P Europe 350 Index Fund (IEV)

International/Developed Country

iShares MSCI Australia Index Fund (EWA)

iShares MSCI Austria Index Fund (EWO)

iShares MSCI Belgium Index Fund (EWK)

iShares MSCI Canada Index Fund (EWC)

iShares MSCI France Index Fund (EWQ)

iShares MSCI Germany Index Fund (EWG)

iShares MSCI Hong Kong Index Fund (EWH)

iShares MSCI Italy Index Fund (EWI)

iShares MSCI Japan Index Fund (EWJ)

iShares MSCI Netherlands Index Fund (EWN)

iShares MSCI Singapore Index Fund (EWS)

iShares MSCI Spain Index Fund (EWP)

iShares MSCI Sweden Index Fund (EWD)

iShares MSCI Switzerland Index Fund (EWL)

iShares MSCI United Kingdom Index Fund (EWU)

iShares S&P/TOPIX 150 Index Fund (ITF)

International/Emerging Country

iShares MSCI Brazil Index Fund (EWZ)

iShares MSCI Malaysia Index Fund (EWM)

iShares MSCI Mexico Index Fund (EWW)

iShares MSCI South Africa Index Fund (EZA)

iShares MSCI South Korea Index Fund (EWY)

iShares MSCI Taiwan Index Fund (EWT)

iShares S&P Latin America 40 Index Fund (ILF)

Global/Broad Market

iShares S&P Global 100 Index Fund (IOO)

Fixed Income

iShares GS $ InvesTop^™ Corporate Bond Fund (LQD)

iShares Lehman 1-3 Year Treasury Bond Fund (SHY)

iShares Lehman 7-10 Year Treasury Bond Fund (IEF)

iShares Lehman 20+ Year Treasury Bond Fund (TLT)

iShares Lehman Aggregate Bond Fund (AGG)

iShares Lehman TIPS Bond Fund (TIP)

An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Specialty

iShares Dow Jones Select Dividend Index Fund (DVY)

This advertising section does not constitute part of the 2004 Semi-Annual Report.


90		2004 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BCFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.

The iShares Funds are not sponsored, issued, endorsed, sold or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

Investing involves risks, including possible loss of principal.

^©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

iShares^® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS

I 800 iSHARES (I 800 474 2737) www.iSHARES.COM

BGI-F-036-02004

Item 2.

Code of Ethics.

Not applicable to this semi-annual filing.

Item 3.

Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4.

Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5.

Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6.

Schedule of Investments.

Not applicable to this filing.

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 9.

Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 10.

Controls and Procedures.

(a) The President and Principal Financial Officer have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in the attached certification, Section 4 (a).

(b) Not applicable.

Item 11.

Exhibits.

(a) (1) Not applicable to this semi-annual filing.

(a) (2) Section 302 Certifications are attached.

(b) Section 906 Certifications are attached.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

iShares, Inc.

By: /s/ Lee T. Kranefuss

Lee T. Kranefuss, President

Date: May 7, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Lee T. Kranefuss

Lee T. Kranefuss, President

Date: May 7, 2004

By: /s/ Michael A. Latham

Michael A. Latham, Principal Financial Officer

Date: May 7, 2004

EX-99.CERT 2 dex99cert.htm SECTION 302 CERTIFICATIONS SECTION 302 CERTIFICATIONS

EX-99.CERT

N-CSRS Exhibit for Item 11(a)(2): SECTION 302 CERTIFICATIONS

I, Lee T. Kranefuss, certify that:

I have reviewed this report on Form N-CSRS of iShares, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 7, 2004	/s/ Lee T. Kranefuss	President

	Lee T. Kranefuss	[Title]
	[Signature]

EX-99.CERT

N-CSRS Exhibit for Item 11(a)(2): SECTION 302 CERTIFICATIONS

I, Michael A. Latham, certify that:

I have reviewed this report on Form N-CSRS of iShares, Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 7, 2004	/s/ Michael A. Latham	Principal Financial Officer

	Michael A. Latham	[Title]
	[Signature]

EX-99.906.CERT 3 dex99906cert.htm SECTION 906 CERTIFICATIONS SECTION 906 CERTIFICATIONS

Ex.99.906 CERT

N-CSRS Exhibit for Item 11(b): CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Lee T. Kranefuss, President, and Michael A. Latham, Principal Financial Officer, of iShares, Inc. (the “Registrant”), each certify that:

1. The Registrant’s periodic report on Form N-CSR for the period ended February 29, 2004 (the “Form N-CSRS”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form N-CSRS fairly presents, in all material respects, the financial condition and results of operations of the Registrant.



Date: May 7, 2004	/s/ Lee T. Kranefuss	President

	Lee T. Kranefuss	[Title]
	[Signature]



Date: May 7, 2004	/s/ Michael A. Latham	Principal Financial Officer

	Michael A. Latham	[Title]
	[Signature]

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.

-----END PRIVACY-ENHANCED MESSAGE-----